Dow Chemical Faces $150 Million Loss as Hurricane 'Beryl' Devastates Texas Plant, Significantly Reducing Third-Quarter Profit Expectations

The Chemical giant Dow Chemical Company lowered its earnings forecast for the third quarter because of the impact of Hurricane Beryl on a plant in Texas, the company said in a statement Thursday. At a conference organized by Morgan Stanley, CEO Jim Fitterling revealed that parts of the plant in Texas were shut down after the hurricane, including a key ethylene cracker that had to suspend production in July. The unit was operating at full capacity before the hurricane to meet market demand.

Fitling further stated that the loss of production and related cost increases due to the outage could cost Dow between $125 million and $150 million. The company now expects third-quarter earnings of about $10.6 billion, down from its previous estimate of $11.1 billion. The news sent Dow's shares down 1.1 percent in after-hours trading. Wall Street analysts had expected third-quarter earnings of $11 billion, according to London Stock Exchange Group (LSEG).

"We expect the affected crackers to resume operations at a slower pace by the end of the quarter," Mr Fitling said. Dow Chemical, based in Midland, Michigan, faces challenges not only from the hurricanes, but also from higher costs and lower margins in Europe. However, Mr Fitling added that market conditions in the US and Europe were expected to improve following the expected rate cuts. In addition, Fitling noted that while the plant was able to maintain operations during the hurricane, the company expects fewer weather-related events in the fourth quarter.