On Sept. 12, Dow Inc. announced that it anticipates its third-quarter operating EBITDA to be around $1.3 billion, roughly 15% lower than consensus estimates from S&P Capital IQ. The decline is attributed to an unplanned outage at one of its ethylene crackers in Freeport, Texas, combined with rising input costs and margin compression in Europe. Dow also adjusted its third-quarter revenue projection to approximately $10.6 billion, about 4% below its late July forecast.

Despite these challenges, Dow reported some relief in its packaging and specialty plastics segment due to improved pricing and lower feedstock costs in North America.

“We were on track with the guidance we provided at the end of Q2,” Dow’s chairman and CEO, Jim Fitterling, stated during the 12th Annual Morgan Stanley Laguna Conference on Sept. 12. “However, the unexpected event at our Texas-8 cracker in July impacted our results.”

Looking ahead to Q4, Dow anticipates normal seasonal demand but expects a positive boost from reduced turnaround costs, higher operating rates as the Texas cracker ramps up, and fewer weather-related disruptions along the US Gulf Coast. Fitterling emphasized that Dow’s strong financial foundation positions the company to achieve more than $3 billion in additional annual returns by 2030.

Dow operates three ethylene crackers at its Freeport site, with the Texas-8 unit having a capacity of approximately 1 million metric tons per year. The cracker was temporarily taken offline for cleaning after a fouling issue in a quench tower, caused by a reduction in operating rates during Hurricane Beryl. Fitterling assured that there were no major mechanical issues, and the unit is expected to restart by the end of October.

While Dow continues to experience "muted demand" in most markets, Fitterling highlighted resilience in North American packaging, driven by both domestic and export demand. However, infrastructure demand, particularly in residential construction, remains weak due to high interest rates. Steady demand persists in consumer electronics and personal care, but discretionary spending on durable goods has decreased. The anticipated rate-cutting cycle in the US is expected to further support Dow’s polyurethane and coatings businesses.

Source: DOW