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Dow Chemical warns on 3Q
Nation's largest chemical company warns of profit shortfall, citing higher costs for oil and gas.
October 2, 2002: 3:48 PM EDT

NEW YORK (CNN/Money) - Dow Chemical Co. warned Wednesday that it will see flat earnings in the third quarter rather than the expected improvement in the bottom line.

Dow Chemical (DOW: down $2.41 to $27.39, Research, Estimates) said it expects to earn about the same 16 cents a share from operations that it earned in the comparable period a year earlier. Analysts surveyed by earnings tracker First Call had a consensus earnings-per-share forecast of 29 cents and a range of estimates from 24 cents to 33 cents.

The nation's largest chemical company blamed higher costs for oil and gas feedstocks, mainly in Europe, as the principal reason for the warning.

Analyst Graham Copely of Sanford Bernstein told Reuters that Dow Chemical has been fighting rising energy prices that make for a difficult backdrop of maintaining costs.

"This is not a Dow specific problem...it's an industry problem," said Copely. "Dow just pre-announced first. Dow has been cutting prices drastically. But you are getting an indication of how competitive this industry is and how lackluster the economy is."

"My fear is that we see a very, very dramatic change in Q4 expectations from here on," Copely noted.

Copely said his fourth-quarter earnings estimate for Dow Chemical is 27 cents a share, compared with a general consensus of 34 cents.

"Both of those numbers are probably too high," he added.

Dow Chemical's warning comes as a turnaround from the stance it held in July when it reported lower second-quarter earnings from the previous year but forecast substantially better earnings for the third-quarter.

Dow's news had a ripple effect in the chemical sector with shares of DuPont Co. (DD: down $2.09 to $37.54, Research, Estimates), Eastman Chemical Co. (EMN: down $3.23 to $37.30, Research, Estimates); Lyondell Chemical Co. (LYO: down $1.25 to $11.50, Research, Estimates) , and Air Products and Chemicals Inc. (APD: down $2.65 to $41.73, Research, Estimates) all down sharply.  Top of page


-- Reuters contributed to this story.




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.