By Scott Kanowsky
Investing.com -- Akzo Nobel NV (AS:AKZO) shares fell on Wednesday after the Dutch paint maker reported lower-than-expected second quarter earnings and revenue.
Adjusted operating income for the period dropped by 26% to €249M, missing analyst estimates of €261M. Revenue jumped by 14% at €2.85B but came in slightly below forecasts.
The company, which is known for its Dulux paint brand, said it saw a slowdown in sales stemming from strict COVID lockdowns in China and a downturn in do-it-yourself home improvement in Europe. These trends, coupled with a recent uptick in global supply chain constraints, led to lower volumes at Akzo Nobel's key paints and coatings businesses in particular.
An inflation-driven surge in raw material and freight expenses by €321M was also offset by a 16% hike in prices. Akzo Nobel said it will continue to pursue "pricing initiatives" to counter cost inflation.
Chief executive Thierry Vanlancker said he expects these inflation pressures to peak in the third quarter of this year, according to Reuters.
Meanwhile, the Amsterdam-based firm said it is looking to deliver €2B in adjusted core earnings in 2023, but flagged that "[m]acroeconomic uncertainties have increased due to geopolitical tension, the resurgence of COVID-19 and inflation."