Dow quarterly results up on higher demand, prices

[NEW YORK] Dow reported quarterly results on Thursday that beat analysts' estimates and forecast better-than-expected sales for the first quarter as demand and prices for its chemicals recover from the impact of the Covid-19 pandemic.

The company, which has slashed its workforce and sold some non-core businesses, said it saw higher demand for materials in which its chemicals are widely used, such as furniture, mattresses, appliances, do-it-yourself paint coatings and packaging.

Dow chief executive officer James Fitterling said he expects new consumer behaviors that have emerged during the pandemic to drive strong demand for the company's products even after the virus outbreak diminishes.

Increased in-home delivery and takeout dining, paired with heightened awareness of food hygiene, will sustain higher demand for food and consumer packaging, Mr Fitterling added.

Dow forecast first-quarter sales between US$10.7 billion and US$11.2 billion, compared with analysts' estimates of US$10.33 billion, according to Refinitiv IBES data.

For the fourth quarter, Dow's volumes sold rose 2 per cent sequentially and 1 per cent versus the year-earlier quarter, reaching pre-pandemic levels in all operating segments.

Prices rose 8 per cent, compared with the third, helped by higher prices for polyethylene, the main ingredient used in making most plastics, and for polyurethanes, used in upholstery, mattresses and car seats.

Net operating income, which excludes some items, rose to US$607 million, or 81 cents per share, in the three months ended Dec 31, from US$376 million, or 50 cents per share, in the third quarter.

Analysts had expected earnings of 67 cents per share.

Dow also reported sales of US$10.71 billion, beating estimates of US$10.03 billion.

REUTERS