(Reuters) -LyondellBasell on Friday missed Wall Street’s quarterly profit expectations, due to maintenance activity and lower volumes in its largest segment supplying raw materials to the automotive, construction and electronics industries.
Shares of the petrochemicals manufacturer fell 2.5% in premarket trading following the results.
The company also announced a cash improvement plan to navigate the current macroeconomic volatility and to boost its earnings by $500 million.
Chemical companies have been struggling due to slumping demand and rising raw material costs, especially in Europe. A rigorous regulatory landscape in the region is also compelling businesses to reassess their approach within the region.
“We continue to take sensible measures to strengthen our near-term cash generation while remaining committed to delivering on our three-pillar strategy through this prolonged industry downturn,” CEO Peter Vanacker said in a statement.
On Thursday, peer Eastman Chemical unveiled plans to curtail expenses due to market volatility from President Trump’s tariff plans.
Business activity in the euro zone barely grew in February, as a small boost in services barely offset ongoing manufacturing decline.
LyondellBasell’s largest segment by sales volume, the olefins & polyolefins-Americas unit, reported adjusted core earnings of $251 million, down from $521 million last year, as higher feedstock costs pressured margins.
Adjusted core profit in its intermediates & derivatives segment, which makes oxyfuels and intermediate chemicals, fell 69.9% to $94 million from the year-ago period.
Revenue for the quarter ended March 31 was $7.7 billion, down from $8.3 billion last year.
The company expects seasonal demand improvements across most businesses in the second quarter.
On an adjusted basis, the company posted a profit of 33 cents per share in the January-March quarter, compared with analysts’ estimate of 43 cents, according to data compiled by LSEG.
(Reporting by Pooja Menon in Bengaluru; Editing by Vijay Kishore)
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