THE WHAT? Dow Chemicals has reported better-than-expected Q2 sales as reopening economies bolster consumer spending post pandemic lockdowns, according to a report by Reuters.
THE DETAILS The company reported US$1.9 billion in profits, up from a US$225 million loss in the comparable period of 2020.
Adjusted net operating income doubled to US$2.72 per share, with net sales of $13.89 billion beating estimates of US$13.07 billion.
THE WHY? Dow attributed the rise to a surge in packaging, construction materials and coatings, industrial and electronics markets, combined with strong demand and higher chemical and resin pricing, according to CFO Howard Ungerleider.
Speaking in a Q2 earnings call, Ungerleider said, “Strong consumer trends continue in retail, housing, and the manufacturing sectors and inventory levels remain low across most of our value chains. We expect these dynamics to continue to support price strength in [Q3] as the industry works to fulfil pent-up demand.”
Looking forward, Dow has predicted Q3 sales of between $13.75 billion and $14.25 billion.
Ungerleider continued, “We continue to be in the early stages of economic recovery. The Delta variant may lead to some slowness in specific countries or regions for a period of time, but over the next four to eight quarters, we still see strong demand.”