Oct 22 (Reuters) – Dow forecast fourth-quarter adjusted core profit above Wall Street expectations and beat quarterly earnings estimates, as higher polyethylene prices and cost-cutting measures more than offset increased raw material and logistics costs.
The closure of the Strait of Hormuz following the escalation of the Iran conflict in late February has disrupted oil and petrochemical flows, tightening global chemical supplies and driving a sharp increase in plastics and polymer prices.
Earlier this year, Dow announced plans to cut about 4,500 jobs, or 13% of its workforce, to reduce costs. The company has also been reviewing assets across its global portfolio, as part of a broader effort to boost profitability.
Dow said on Thursday it has implemented nearly 70% of its planned workforce reduction and expects its restructuring program to deliver more than $200 million in benefits in the second half of this year.
CEO Karen S. Carter said in a statement that Dow remains on track to generate more than $1 billion in annual core profit gains in both 2026 and 2027 through its cost-cutting and portfolio optimization initiatives, including the closure of higher-cost upstream assets.
Shares of the company were up 2.3% in premarket trading.
Dow forecast fourth-quarter adjusted core earnings of about $1.54 billion, above analysts’ average estimate of $1.38 billion, according to data compiled by LSEG.
Net sales from Dow’s packaging and specialty plastics segment in the quarter ended September 30 rose over 18% to $5.8 billion from a year ago, driven by higher polyethylene and functional polymers prices in all regions.
Quarterly revenue at its industrial intermediates and infrastructure segment rose 7.9% to $3.06 billion, while net sales at the performance materials and coatings unit rose over 8% to $2.25 billion.
The Michigan-based company reported an adjusted profit of 71 cents per share, compared with analysts’ average estimate of 64 cents.
(Reporting by Pooja Menon in Bengaluru; Editing by Shinjini Ganguli)
