Shares of Trinseo, a Berwyn-based plastic, rubber, and polystyrene maker whose customers include Lego, automakers, and other industrial companies, fell 20 percent to close at $60.35 a share after the company warned of a $16 million third-quarter profit shortfall, which it blamed mostly on falling auto sales and global-trade uncertainty.
The drop wiped out two years of share-price gains for the company, the latest U.S. manufacturer reeling from weaker world sales. DowDuPont, PPG, TE Connectivity, and other big companies with large China factories, customers, or both have also dropped sharply in the last few weeks as President Trump and Chinese President Xi Jinping have escalated select import tariffs and traded accusations of economic bullying.
Trinseo said in a statement that third-quarter 2018 net income is now estimated to be $74 million to $80 million, down from a previous projection of $88 million to $96 million. The unexpected expenses include a drop of $9 million in operating profits due to weak auto (and tire) sales, plus "a reduction in customer demand driven by the continued uncertainty of global trade dynamics" and slow orders from industrial customers betting raw materials prices will fall, chief executive Chris Pappas said.
The company, spun off from Dow Chemical Co. in 2009, also said it would cost an extra $6 million to bring outsourced administrative services back in-house.
"Weakness in the automotive and tire markets, as well as the slowdown in China, will impact our future results," Trinseo said. The company expects to post final results for the quarter ended Sept. 30 on Nov. 7.