MIDLAND, Mich. – Dow Chemical Co’s. quarterly profit and revenue missed Wall Street’s expectations as demand for electronics, plastics and coatings plunged, causing the company to slash production and aggressively discount some products.
The results sent shares of Dow, the largest U.S. chemical maker by revenue, down 1 percent.
Dow’s operating rate, a reflection of its full capacity, fell 9 percentage points to 72 percent in the quarter, levels not seen since the last recession.
Most of the capacity cuts came in Europe, where the continent’s debt crisis has sharply affected exports and where demand for Dow’s products is weakest, CEO Andrew Liveris told Reuters.
“We quickly intervened and started moving volume and basically gave up on price,” he said on Thursday. “Europe is a headwind for the whole year.”
The U.S. economy is “actually recovering nicely,” with electronic sales improving from a weak fourth quarter, though weak construction demand is a concern, he said.
The Chinese economy should continue to be strong, bolstered by large spending on manufacturing and construction, Liveris said.
“I don’t think we’re going to have to worry about China being a less-than-6-percent growth economy for a long time,” he said.”
For the fourth quarter, the company posted a net loss of $20 million, or 2 cents per share, compared with net income of $426 million, or 37 cents per share, in the year-ago period.