Dow’s Misses Q2 Expectations & Seeks to Reduce Spending

By John F. Heerdink, Jr.

Dow (NYSE: DOW) released its Q2 results last week missing analysts’ expectations. The company is now expected to cut the year spending amid prolonged U.S-China trade dispute and attributes excess supply of ethylene and polyethylene from the United States, China, Korea, and Thailand for disrupting prices.

Company’s net profit dropped 39% to $649 million for the quarter ending June 30. Net operating earnings dropped to 86 cents per share ahead of estimates of 84 cents per share. Net sales of $11.01 billion were reported as against estimates of $11.24 billion. Revenue from global ethylene and polyethylene business dropped 15% for the quarter.

“Looking ahead, we still see global growth, but the pace of that expansion has slowed, as buying patterns remain cautious due to the ongoing trade and geopolitical uncertainties,” stated Dow Chief Executive Officer Jim Fitterling.

Dow expects third-quarter revenue of $10.50 billion to $11 billion, below a forecast of $12.03 billion. It further plans to reduce spending in 2019 by 25%.

Dow (NYSE: DOW) combines the power of science and technology to passionately innovate what is essential to human progress. The Company is driving innovations that extract value from material, polymer, chemical, and biological science to help address many of the world’s most challenging problems, such as the need for fresh food, safer and more sustainable transportation, clean water, energy efficiency, more durable infrastructure, and increasing agricultural productivity. To learn more about Dow (NYSE: DOW) and to continue to track its progress please visit the Vista Partners Dow Coverage Page.

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UPDATE 2-Dow forecasts third-quarter revenue below estimates, shares dip

Compounding the woes for chemical companies reeling under weak global demand and trade conflicts is an oversupply of ethylene and polyethylene used in making plastics from the United States, China, Korea and Thailand that has hurt prices. Dow said it plans to spend $2 billion in 2019, 25% less than previously expected, as it looks to cut costs by delaying a…..

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