Chemicals maker Dow tops Wall Street estimates on demand growth

The Dow Chemical logo is displayed on a board above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S. on December 22, 2015. REUTERS/Lucas Jackson/File Photo

(Reuters) – Chemicals maker Dow beat first-quarter profit estimates on Thursday, helped by higher sales volumes as global manufacturing activity shows signs of growth.

China’s manufacturing activity expanded for the first time in six months in March while U.S. manufacturing grew for the first time in about 18 months, benefiting Dow whose products are used in a range of industries.

Dow’s CEO Jim Fitterling attends a session at the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 21, 2020. REUTERS/Denis Balibouse/ File photo

The company said volumes rose 1% compared to last year, with gains in all regions except Europe, the Middle East, Africa and India.

U.S. prices of natural gas, a key feedstock for chemical firms, touched a three-and-a-half-year low in February due to mild weather and boosted its margins.

Its net sales declined by 9% to $10.77 billion, hurt by a 10% decline in local prices but topped expectations of $10.74 billion, according to LSEG data.

Chemical firms had raised their prices in 2022 to tackle inflation after Russia’s invasion of Ukraine tightened feedstock supplies.

Sales in its largest segment, packaging and specialty plastics, fell 11% to $5.43 billion, hurt by a decline in prices.

Performance materials and coating sales fell about 5% to $2.16 billion but beat Wall Street estimates of $2 billion.

“In the near-term, demand in key end-markets from packaging and mobility to energy applications are trending sequentially higher,” Jim Fitterling, chief executive officer of Dow, said in a statement.

The Midland, Michigan-based company reported operating earnings per share of 56 cents for the quarter ended March 31, compared with the average analyst estimate of 45 cents, according to LSEG data.

(Reporting by Sourasis Bose in Bengaluru; Editing by Maju Samuel)