UPDATE 2-Dow expects strong first-quarter sales on higher prices

·1 min read

(Compares with estimates, adds CEO comments)

Jan 27 (Reuters) - Dow Inc on Thursday forecast better-than-expected sales for the current quarter after its fourth-quarter profit and revenue beat estimates, helped by higher prices for its products as supplies remained tight amid strong demand.

Demand for the company's chemicals, used in everything from food packaging and mattresses to textiles and electronics, has been strong since it began recovering after a brief hit at the start of the pandemic.

That along with supply chain pressures, pandemic-related logistical constraints and weather-related outages at plants have helped the company boost prices for its products.

Overall prices climbed 39% in the fourth quarter from a year earlier, while volumes fell 4%.

Dow forecast first-quarter sales between $14 billion and $14.5 billion, above analysts' estimates of $12.84 billion, according to Refinitiv IBES data.

Logistics constraints are expected to ease throughout the year to fulfill elevated order backlogs and pent-up customer demand, Chief Executive Officer Jim Fitterling said.

"In 2022, we expect continued demand strength across our end markets, supported by growing industrial production and sustained consumer spending," Fitterling added.

The company's net operating income, which excludes certain items, rose to $1.6 billion, or $2.15 per share, in the three months ended Dec. 31, from $607 million, or 81 cents per share, a year earlier.

Analysts were expecting a profit of $2.04 per share.

Sales rose 34.2% to $14.37 billion in the last three months of 2021 and came in slightly above estimates of $14.31 billion.

However, this marked the first sequential decline in Dow's revenue in six quarters. (Reporting by Ruhi Soni and Arathy Somasekhar in Bengaluru; Editing by Shounak Dasgupta)

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