Dow Chemical reports third-quarter profits, but sees recession

Oct 23, 2008, 12:59 GMT

Midland - Dow Chemical Thursday reported profits for the third quarter, but it said rising costs of raw materials and energy had weighed on the company and that it sees a recession on the horizon.

'The global economy is now feeling the full effects of the same economic issues that have plagued the US for the past several quarters,' chairman and CEO Andrew N Liveris said in a statement.

'In our view, we will likely see a global recession through most of 2009.

'Dow is well positioned, however, to weather this increasingly difficult economic downturn. We have a strong balance sheet, we have a track record of strong financial discipline and we are accelerating our focus on what we can control.'

Quarterly overall sales rose 13 per cent to 15.4 billion dollars, from 13.6 billion dollars in the same period in 2007.

Pre-tax earnings fell to 633 million dollars, a drop of more than 40 per cent from the third quarter of 2007.

Net income increased to 428 million dollars from 403 million dollars the year before, but the company noted that the 2007 figures were affected by a change in German tax law.

The company reported a 50 per cent increase in expenditures for material, energy and transport costs.

It also reported profit losses due to hurricanes, which shut down production at times this summer and autumn.

The reported profit outperformed analyst's expectations.

Shares rose in early trading.