Dow Chemical Posts Loss; Cuts 4,000 Jobs

Date: 5 February 2003
Source: Reuters

Date: 5 February 2003

Dow Chemical Co. DOW.N , the No. 1 U.S. chemical maker, said on Thursday it would eliminate up to 4,000 jobs this year as high energy costs and an asbestos charge widened its fourth-quarter loss.The high cost of crude oil and natural gas wiped out a 9 percent rise in revenue.

That, combined with weak U.S. industrial demand, pushed Dow to pare 8 percent of its work force and cut capital spending by $400 million for 2003.

Energy costs rose 35 percent in the quarter, with no relief in sight. Dow, like other chemical companies, uses the fuels in plastics and chemicals production and has struggled with two years of high inventories and soft prices.

"This quarter is marked by very high energy costs and by very low pricing power, but that's true of everybody because the manufacturing sector is not coming out of its shell," said David Kerans, analyst with Argus Research.

Oil and gas prices have jumped on war fears, cold weather and tightened supplies of Venezuelan crude, with change expected in the near term.

Shares of Midland, Mich.-based Dow, which gained 8.75 percent during the quarter, closed down 3.78 percent to $28.00 in heavy trade the New York Stock Exchange Thursday.

Along with Dow, smaller rivals Lyondell Chemical Co. LYO.N and IMC Global Inc. IGL.N also posted wider fourth-quarter losses.
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