DOW CHEMICAL’S quarterly profit and revenue missed Wall Street’s expectations yesterday as demand for electronics, plastics and coatings plunged, causing the company to slash production and aggressively discount some products.
The results sent shares of Dow, the largest US chemical maker by revenue, down 1.2 per cent.
Dow’s operating rate, a reflection of its full capacity, fell nine percentage points to 72 per cent in the quarter, levels not seen since the last recession.
Most of the capacity cuts came in Europe, where the continent’s debt crisis has sharply affected exports and where demand for Dow’s products is weakest, chief executive Andrew Liveris said.
“We quickly intervened and started moving volume and basically gave up on price,” he said yesterday. “Europe is a headwind for the whole year.”
The US economy is “actually recovering nicely”, with electronic sales improving from a weak fourth quarter, though weak construction demand is a concern, he said.
For the fourth quarter, the company posted a net loss of $2m, or two cents per share, compared with net income of $426m, or 37 cents per share, in the year-ago period.
Excluding one-time items, the company earned 25 cents per share.
Revenue rose two per cent to $14bn. Analysts expected $14.1bn.
