Dow Chemical Says Wet Weather Hurt Agriculture, Paint Sales
Dow Chemical Co. (DOW), the largest U.S. chemical maker, said it’s facing “headwinds” in the second quarter including adverse weather that probably eroded sales of agriculture products and house paint.
Sales at Dow AgroSciences, which makes pesticides and seeds, and at the coatings unit were hurt “a little bit” by unusually wet and cold weather in the U.S., Chief Financial Officer William H. Weideman said today on a webcast presentation from the Goldman Sachs Basic Materials Conference in New York.
“Demand is still on a steady recovery in the U.S.,” Weideman said. “There are some headwinds we are seeing in the second quarter.”
Sales to carmakers have been hurt by a parts shortage stemming from the March earthquake and tsunami in Japan, he said. Dow, based in Midland, Michigan, supplies plastics, wire coatings and foams to the auto industry. Asian demand for polyethylene plastic dipped for three weeks in the quarter in anticipation of lower prices, Weideman said.
Total demand is “strong” in Latin America, Asia and northern and eastern Europe, Weideman said. Dow, which got two- thirds of revenue last year from outside the U.S., plans to boost production of ethylene, a key plastics ingredient, by 20 percent within three years. The plastics business has “upward momentum” as supplies tighten and U.S. natural gas remains inexpensive relative to oil, he said.
Dow fell 14 cents to $35.47 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 3.9 percent this year.
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