updated 10/23/2008 8:17:34 AM ET 2008-10-23T12:17:34

Dow Chemical Co reported lower third-quarter profit on Thursday, citing a drop in sales volumes and shutdowns from hurricanes, and warned that the global economy was likely to suffer through a recession for most of 2009.

The largest U.S. chemical maker, which earlier this year raised prices for all its products because of surging energy costs, was forced to shut down a large part of its North American operations in September because of damage from hurricanes Ike and Gustav.

Those storms, coupled with sinking global demand and the sale of some assets, reduced quarterly sales volumes by 9 percent from a year earlier, the Midland, Michigan-based company said.

Dow, like other chemical makers has suffered because of the jump in oil and natural gas prices, which peaked in early July. Even with the 50 percent drop in those energy prices since then, Dow’s costs rose $2.6 billion from the year-earlier level.

The company also said it was reassessing its long-term targets in light of what Chief Executive Andrew Liveris said was a global economic recession.

“We did say we would earn more than $3 (per share) in an industry trough,” Liveris said in an interview with Reuters. “But I also did say, if there was a recession, all bets are off. Frankly, we’re going to re-look at that number in the context of a very weak ’09.”

Excluding items, Dow posted earnings of 60 cents a share, down from 84 cents a year earlier.

Analysts on average were expecting 56 cents a share, according to Reuters Estimates.

Net income rose to $428 million, or 46 cents a share, from $402 million, or 42 cents a share.

Quarterly revenue rose 13 percent to $15.4 billion, driven primarily by price increases.

Shares of Dow, which had fallen about 33 percent over the last three months, rose 7 percent to $23.65 in trading before the market opened on Thursday.

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