DuPont's second quarter sales decline 1%

DuPont's second quarter sales decline 1%

Operating earnings in ag segment increased 12%.

DuPont today announced second quarter 2016 results.

Highlights

-Generally Accepted Accounting Principle earnings per share totaled $1.16 versus $1.06 in 2015. Operating earnings per share increased 14% to $1.24, including $0.05 per share of negative impact from currency.

Related: Dow-DuPont shareholders approve merger of equals

-Sales of $7.1 billion reflected 2% volume growth, due to agriculture, performance materials and nutrition and health. Local price, currency and portfolio in aggregate negatively impacted sales by 3%, resulting in total sales declining 1%.

DuPont announced second quarter results. Generally Accepted Accounting Principle earnings per share totaled $1.16 versus $1.06 in 2015. (Photo: Mark Makela/Getty Images)

-Agriculture sales reflected 3% volume growth, driven by higher corn seed and insecticide sales, partially offset by lower soybean volumes in North America. Volume growth was offset by negative impacts from currency and portfolio.

-Total segment pre-tax operating earnings of $1,613 million increased 11% despite approximately $60 million of negative impact from currency.

-GAAP operating costs declined by approximately $160 million. Excluding significant items and non-operating pension/OPEB costs, operating costs declined by approximately $220 million, a 12% reduction versus prior year.

-GAAP corporate expenses declined 26% versus prior year. Excluding significant items, corporate expenses declined by $65 million or 44%.

-DuPont now expects full-year 2016 GAAP earnings to be in the range of $2.70-$2.75 per share and has increased the low end of its previous 2016 operating earnings range by $0.10 per share to $3.15–$3.20 per share.

Comments

“Our continued focus on our plan delivered strong results. Continued progress on our cost savings program keeps us on track to reach $1 billion on a run-rate basis by year-end,” said Ed Breen, chair and CEO of DuPont. “We are pleased with the overwhelming vote of approval the merger received from our shareholders. We are preparing to hit the ground running immediately after closing, which we continue to expect later this year as we work closely with regulators in all relevant jurisdictions. We look forward to standing up three strong businesses and enhancing our ability to offer innovative, value-added solutions and increased choice to our customers.”

Agriculture segment

Operating earnings of $865 million increased $93 million, or 12%, on lower product costs, higher volumes and cost savings, partially offset by a $36 million negative currency impact. Increased corn seed and insecticide volumes were partially offset by lower soybean volumes. Excluding currency impact, operating earnings increased 17%.

2016 outlook

The company expects full-year 2016 GAAP earnings to be $2.70 to $2.75 per share and operating earnings to be $3.15 to $3.20 per share, an increase of $.10 per share to the low-end of its previous range. The estimated negative currency impact for full-year 2016 is now expected to be about $.15 per share. The company continues to expect a benefit of $0.64 per share from the 2016 global cost savings and restricting plan and a headwind from a higher base tax rate in 2016 of about $.10 per share. The company’s full-year 2016 GAAP earnings include an expected charge of about $.45 per share for transaction costs associated with the planned merger with Dow. For third quarter 2016, the company expects operating earnings per share to be 50% higher than the prior year.

Source: DuPont

Related articles:

DuPont reported a higher than expected increase in second quarter profit. - CNBC

DuPont shares climbed 1% as the company's outlook rose. - The Wall Street Journal

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