Chemicals maker Dow forecasts higher profit as Hormuz closure lifts plastics prices
Dow expects fourth-quarter adjusted core earnings of about $1.54 billion, above the $1.38 billion analysts expected, betting that higher polyethylene prices and job cuts will offset costlier raw materials and logistics caused by the Iran conflict.
US chemicals maker Dow on Thursday, 22 October, forecast fourth-quarter adjusted core earnings of about $1.54 billion, above the analysts’ average estimate of $1.38 billion compiled by LSEG, Reuters reported.
Plastics prices up
The closure of the Strait of Hormuz after the conflict with Iran escalated in late February has disrupted oil and petrochemical flows, tightening chemical supplies and pushing up plastics prices. Third-quarter sales at Dow’s packaging and specialty plastics unit rose more than 18% to $5.8 billion, and adjusted earnings of 71 cents per share beat the 64-cent estimate.
Cost cuts
Earlier this year Dow announced about 4,500 job cuts, or 13% of its workforce; nearly 70% have been carried out, according to Reuters. Its Sadara joint venture with Saudi Aramco, shut in March, has partially restarted.
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