Dow forecasts quarterly core profit slightly above estimates, warns of Middle East uncertainty

Dow Inc forecast third-quarter core profit slightly above Wall Street expectations, while warning that the quarter ‌ahead remains difficult ⁠to ⁠predict as the U.S.-Iran conflict continues to create uncertainty across several end markets.

Shares of the chemicals ​maker rose 2.2% in morning trading.

The near shutdown of the Strait of Hormuz, a key transit route, disrupted oil and petrochemical flows, tightening global chemicals supply and increasing prices of plastics and polymers.


Dow said in April the conflict could delay ​or cancel expansion plans while increasing pressure to rationalize capacity ⁠as companies ‌reassess investments amid heightened uncertainty and supply chain disruptions.

The company has been reviewing non-producing assets across its portfolio, including power and steam ⁠facilities and pipelines, as the chemical industry grapples with higher feedstock and energy costs amid weak demand in key markets.

CEO Karen Carter said the company expects to generate about $200 million in additional benefits from the "Transform to Outperform" program this year, taking potential gains to more than $1.3 billion for the year.

Dow forecast current-quarter core earnings of about $1.75 billion, slightly above analysts' average estimate of $1.74 billion, according to data compiled by LSEG.

It ‌said the third quarter is expected to reflect the impact of lower prices in the Americas, following pricing declines in June, ​higher maintenance at ​its U.S. Gulf ⁠Coast assets and normal seasonal weakness in coatings and construction markets.

These pressures are expected to be partly offset by its cost-cutting program, which should provide about $130 million ​in core profit support.

Quarterly net sales from its packaging and specialty plastics segment rose 27% to $6.4 billion from a year earlier, driven by higher polyethylene prices.

The Michigan-based company reported an adjusted profit of $1.44 per share for the quarter ended June 30, beating analysts' average estimate of $1.28 per share.

(Reporting by Pooja Menon in Bengaluru; Editing by Joyjeet Das and Sriraj Kalluvila)