By Tanay Dhumal
(Reuters) – Chemical company Dow said on Thursday it has begun a review of some of its European assets, and forecast fourth-quarter revenue below market expectations.
The review was necessitated by weak demand recovery and competitive regulatory policies, Dow said, sending its shares down 1.2% to $50.86.
The European assets account for nearly 20% of its sales in the EMEAI region. Dow aims to complete the review by mid-2025.
The review will focus on assets in its polyurethane business, CEO Jim Fitterling said.
Muted demand in Europe and China has led to lower prices and volumes, resulting in a 2% drop in net sales at its industrial intermediates and infrastructure segment.
“Meaningful recovery has yet to materialize in Europe and China. In addition, Europe’s regulatory environment has led to increasing challenges across many sectors and value chains,” Fitterling said.
The company expects $10.7 billion in fourth-quarter sales, slightly below expectations of $10.79 billion, according to data complied by LSEG.
Macro recovery is still pending and the continued weakness into next quarter likely does not change the cautious narrative much, Barclays’ analysts said in a note.
However, the company beat third-quarter profit expectations on higher North America demand for industrial items such as polyethylene used in packaging.
Quarterly revenue rose 1.4% to $10.88 billion, despite operations taking a hit due to Storm Beryl. Analysts on average were expecting $10.65 billion.
Dow said it was reducing exposure to low-value merchant orders by shutting down its Freeport unit in 2025. The unit represents about 20% of North America industry capacity.
Its adjusted profit of 47 cents per share exceeded market expectations by a cent.