Costs Consume Dow Chemical
http://www.forbes.com/markets/2008/07/24/dow-chemi [2008-7-25]
Tag : chemical company
Rising input costs are hurting Dow Chemical's bottom line, stifling its attempts to make up for expenses byraising prices and pushing second-quarter profits below WallStreet's expectations.
The specialty-chemicals maker posted a double-digit profit declinein the quarter ending June 30, which it blamed on spiking energyand raw material costs. Dow Chemical also warned that the UnitedStates economy would continue to weaken through the rest of 2008,and high crude prices made the outlook for the global economy alsolook uncertain.
Shares of Dow Chemical (nyse: DOW - news - people ) had moved up on Wednesday in anticipation of its earningsreport, but they fell 2.2%, or 75 cents, to $33.49, in afternoontrading on Thursday.
The Midland, Mich.-based company makes thousands of products,ranging from plastic wraps to car parts and insecticides.
"Dow is continuing to battle with raw [material] costs. Despiteacross-the-board double digit price increases, it is still seeingmargin compression," Morningstar analyst Den Johnson said.
Rising input costs are hurting Dow Chemical's bottom line, stifling its attempts to make up for expenses byraising prices and pushing second-quarter profits below WallStreet's expectations.
The specialty-chemicals maker posted a double-digit profit declinein the quarter ending June 30, which it blamed on spiking energyand raw material costs. Dow Chemical also warned that the UnitedStates economy would continue to weaken through the rest of 2008,and high crude prices made the outlook for the global economy alsolook uncertain.
Shares of Dow Chemical (nyse: DOW - news - people ) had moved up on Wednesday in anticipation of its earningsreport, but they fell 2.2%, or 75 cents, to $33.49, in afternoontrading on Thursday.
The Midland, Mich.-based company makes thousands of products,ranging from plastic wraps to car parts and insecticides.
"Dow is continuing to battle with raw [material] costs. Despiteacross-the-board double digit price increases, it is still seeingmargin compression," Morningstar analyst Den Johnson said.
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