By Scott Kanosky
Investing.com – Akzo Nobel NV (AS 🙂 warned that it expects to post a decline in third-quarter earnings, citing the impact of macroeconomic headwinds on consumer confidence.
In a statement, the Paints and Coatings group said adjusted operating income during the three-month period is now seen in the €195 million to €215 million range, down from €241 million during the corresponding time frame last year. She added that the estimate excludes the effect of hyperinflation in Turkey.
The company indicated that raw material costs will be at their highest since the start of the latest rise in inflation that began in early 2021, although price increases will partially offset these pressures.
Meanwhile, customers and channel partners are moving to dump inventory in Europe and China, Akzo Nobel said. Dulux brand owner previously missed earnings estimates in the second quarter due to slumping demand in Europe and the COVID-19 shutdown in China affecting supply chains.
However, Akzo Nobel noted that the supply of raw materials is becoming normal, while these expenditures have also started to decline on a large scale. The company said it expects to address the slight increase in costs through “ongoing” price increases throughout the remainder of the year.