Dow forecasts a difficult fourth quarter due to energy costs and inflation

Dow Inc. on Thursday forecast a fourth trimester gloomy, after its third-quarter profit more than halved, as the chemical giant grapples with rising energy prices and a slower-than-expected recovery in demand, causing its shares fell about 3 percent.

The company said the macroeconomic environment remains dynamic due to high inflation and the impact of aggressive rate hikes to curb it, and outlined plans to cut $1 billion of costs in 2023.

Dow expects fourth-quarter net sales to be between $11.5 billion and $12 billion, versus the consensus of Wall Street $12.3 billion, according to Refinitiv data.

Despite lingering cost and supply chain pressures in the quarter, Dow beat analyst estimates for both revenue and profit in the third quarter.

Underlying demand remains resilient in the US,” the company said.

However, soaring energy and commodity costs are “driving record inflation and weighing on demand in the eurozone, while lockdowns in China continue to put pressure on both consumer spending and infrastructure investment,” he said. Chief Executive Jim Fitterling in a statement.

Net income available to Dow shareholders fell 56% to $739 million, or $1.02 per share, in the three months ended September 30, from $1.68 billion, or $2.23 per share. from the previous year.

Excluding one-time items, Dow’s operating profit was $1.11 per share, the lowest in six quarters but beating market expectations of $1.08 per share.

Sales fell 4.9% to $14.2 billion due to declines in its intermediate industrial products and infrastructure units, as well as packaging and specialty plastics. Analysts had expected revenue of $13.1 billion.