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Chemical earnings nose-dive in 2023

Company executives warn of a difficult start to 2024

by Alexander H. Tullo
January 25, 2024 | A version of this story appeared in Volume 102, Issue 3


A headquarters building with the Dow emblem on it.
Credit: Dow
Dow's Midland, Michigan, headquarters

Chemical companies’ 2023 financial results are starting to trickle in: with meek performance in Europe and China, a sluggish construction market, and industry-wide inventory destocking, it was an awful year for chemical makers. And company executives expect a turbulent start to 2024.


Decrease in Dow’s sales in 2023


Decrease in Dow’s earnings in 2023

Dow, the first major chemical maker to report complete results, posted a 21.6% sales decline from 2022. Net income before unusual items dropped 64.9%.

Volume gains in Dow’s polyethylene and performance material and coatings businesses were more than offset by lower prices. “As we enter 2024, we expect near-term demand to remain pressured by elevated inflation, high interest rates, and geopolitical tension,” Dow chief financial officer Jeffery L. Tate said in a conference call with analysts.

BASF, the world’s largest chemical maker, had expected 2023 to be a terrible year, but the company revealed in a Jan. 19 preview that results would fall short of even its own dour expectations. Sales of $75.7 billion came in below the $79 billion–$82 billion that BASF had forecast in July. Its sales in 2022 were $94.7 billion.

BASF posted pretax earnings before special items of $4.1 billion, missing its estimated range of $4.3 billion–$4.8 billion. The company blamed unplanned plant outages and profits that tumbled faster than it could cut costs.

US firms are also warning of disappointing performance. DuPont announced a preliminary sales figure of $12.1 billion for 2023, about $100 million below its estimate in November.

In a statement, DuPont CEO Ed Breen says 2024 has started off slowly. “As we finished 2023, we saw additional channel inventory destocking with our industrial business as well as continued weak demand in China,” he says. “We are seeing similar trends continue and expect sequential sales and earnings to decline in the first quarter of 2024.”

Huntsman expects pretax earnings for 2023 to be between $40 million and $45 million, below its estimate of $65 million–$90 million..



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