LONDON (MarketWatch) -- Dow Chemical on Thursday reported a 6% profit rise as price hikes offset volume declines and warned of a global recession next year. Dow said its third-quarter profit rose to $428 million, or 46 cents a share, from $403 million, or 42 cents a share. Sales climbed 13% to $15.4 billion as a price hike of 22% offset a 9% drop in volume due to the impact of Hurricanes Gustav and Ike, further weakening of demand as well as the price hikes. The Midland, Mich.-based chemical giant said adjusted for one-time items like the hurricanes, it would have earned 60 cents a share. The company was expected to earn 61 cents a share on sales of $15.7 billion, according to analysts polled by FactSet Research. "Our ability to take proactive measures, including the implementation of two broad-based price increases and aggressive cost controls, allowed us to post solid results against worsening market conditions, record high raw material costs and two hurricanes on the U.S. Gulf Coast," said Andrew Liveris, chairman and chief executive. He said the company was well positioned to weather the economic downturn as he gave a gloomy assessment. "The global economy is now feeling the full effects of the same economic issues that have plagued the U.S. for the past several quarters. These issues have now been exacerbated by the lack of credit, resulting in a drop in demand not only in the U.S., but around the world. In our view, we will likely see a global recession through most of 2009," Liveris said. Dow shares ended trading Wednesday down 7.5% to $22.11, but were up in after-hours action. Dow is in the process of acquiring Rohm & Haas, which beat analyst estimates by 3 cents a share for the third quarter when it reported earnings on Wednesday. The deal is worth $15 billion.

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