(Reuters) -Dow Inc halved its dividend and forecast third-quarter revenue below analysts’ expectations as the chemicals maker navigates a prolonged downturn in the industry, sending its shares down nearly 10% in premarket trading.
Global chemical companies are feeling the pressure of higher production costs in Europe, lackluster demand and stringent environmental regulations.
Earlier this month, Dow said it would shut down three upstream plants in Europe and cut around 800 jobs in response to structural challenges in the region. It began a strategic review of some of its European assets in 2024.
Quarterly net sales from the company’s packaging and specialty plastics segment, its largest by revenue, fell 8.9% to $5.03 billion from a year earlier, weighed down by tariff uncertainties.
The company had flagged in its first-quarter earnings call that it expects extended pressure due to uncertainty from U.S. President Donald Trump’s shifting trade policies.
Dow on Thursday declared a quarterly dividend of 35 cents per share. That compared with 70 cents per share announced in April.
“With this adjustment, we are aligning the payout size to provide additional financial flexibility,” CEO Jim Fitterling said in a statement.
Dow expects third-quarter net sales of $10.2 billion, below analysts’ average estimate of $10.6 billion, according to data compiled by LSEG.
The Michigan-based company reported an adjusted loss of 42 cents per share for the second quarter ended June 30, compared with analysts’ average estimate of a loss of 17 cents per share.
(Reporting by Pooja Menon in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)
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