(Reuters) – Chemicals maker Dow Inc exceeded market estimates for quarterly profit on Thursday as strong seasonal demand from the North American market offset a COVID-driven slowdown in China.
The North America business – Dow’s biggest – posted a 16% jump in sales on higher orders for its silicones and coatings applications used in the electronics, construction and healthcare industries.
The company also benefited from higher prices that lifted sales at its packaging and specialty plastics unit by 16%. Sales at the industrial business rose 4%, boosted by firm demand for chemicals required in construction.
“Focus on disciplined execution enabled us to navigate the impacts of pandemic-related lockdowns in China, continued logistics constraints, and higher energy and raw material costs,” Chief Executive Jim Fitterling said in a statement.
A slowdown in the Chinese economy this year due to renewed COVID-19 curbs has raised fears around corporate earnings, while decades-high inflation has driven up prices of raw materials.
Reflecting the toll of the slowdown, volumes at two of Dow’s three main businesses declined in the quarter ended June 30. A stronger dollar also weighed on sales of the global company.
Still, the North America strength lifted total net sales by 13% to $15.66 billion.
On an adjusted basis, Dow posted a profit of $2.31 per share, beating analysts’ estimates of $2.14, according to Refinitiv IBES data.
(Reporting by Shariq Khan and Rithika Krishna; Editing by Aditya Soni)