Sector News

Dow cites global uncertainty in $500M capex guidance cut

July 25, 2019
Chemical Value Chain

Dow Inc. (NYSE:DOW) -1.1% pre-market after reporting better than forecast Q2 earnings alongside a 14% Y/Y drop in revenues and cutting its full-year capex guidance by $500M, citing global trade and geopolitical uncertainties.

“We still see global growth, but the pace of that expansion has slowed, as buying patterns remain cautious due to ongoing trade and geopolitical uncertainties,” CEO Jim Fitterling says, as the company now expects $2B in capital spending for the year vs. its previous outlook for $2.5B.

Dow says Q2 profit of $75M fell 94% from the year-ago quarter, and operating earnings of $0.86/share fell from $1.41 a year ago but beat analyst consensus.

Q2 revenues fell 14% to $11B, mostly due to local price declines in polyethylene, siloxanes and isocyanates and lower sales of hydrocarbon co-products; sales volumes declined 3% vs. year-ago pro forma results, driven primarily by higher ethane feedstock usage and lower hydrocarbon co-product sales, due to increased ethylene integration from the startup of new downstream assets.

By: Carl Surran
Source: Seeking Alpha

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