Dow Chemical Co (DOW.N) reported a lower-than-expected adjusted profit on Thursday as international demand for polyurethane and chlorine withered, especially in China and Europe.
The earnings miss surprised both investors and analysts on Wall Street, sending Dow Chemical shares down 4.9 percent in afternoon trading to $32.92. Shares had dropped as much as 6 percent earlier in the day.
For the fourth quarter, the company's net loss widened to $716 million, or 61 cents per share, from $20 million, or 2 cents per share, in the year-earlier quarter.
Excluding one-time items, the company earned 33 cents during the quarter. By that measure, analysts expected 34 cents per share, according to Thomson Reuters I/B/E/S.
Sales fell 1 percent to $13.92 billion. Analysts expected sales of $13.69 billion.
Sales of chlorine were hurt by repairs and shutdowns to production facilities of Dow Chemical, the world's largest chlorine producer.
Results were especially weak for polyurethane foams, coatings and paints, and electronic materials.
The sharpest drop in volume, the physical amount of product sold, was in Europe, which drained overall results.
"Weak volumes in Europe definitely held them back," Deutsche Bank analyst David Begleiter said of Dow Chemical's results.
Dow Chemical's sales of electronic parts to solar panel and smartphone makers also disappointed. While sales rose 3 percent in the electronics unit, pricing fell 4 percent, implying the company cut prices to simply move product.
"It's just generally a weak electronics market," Alembic Global Advisors analyst Hassan Ahmed said.
Among its markets, China was particularly a weak spot in "the second half of 2012," Dow Chemical Chief Executive Andrew Liveris said.
In an interview on the CNBC cable news channel early Thursday, Liveris said he expected sales in China to improve in 2013.
In a bid to reassure investors, Liveris said on a conference call that Dow Chemical would continue to rein in costs and boost margins.
"The Dow (Chemical) team understand its priorities, which are clear, and we know what needs to be done," he said.
Dow Chemical took a $990 million charge in the quarter, part of a plan announced in October to lay off 5 percent of its workforce, close 20 plants and write down the value of its underperforming lithium-ion battery business.
(Editing by Jeffrey Benkoe and Bernadette Baum)