Diversified chemicals manufacturer and Dow-30 component DowDuPont (DWDP – Free DowDuPont Stock Report) has reported earnings for the December quarter. The conglomerate posted sales of $20.1 billion, benefiting from healthy underlying demand for many of its products. Adjusted earnings per share came in at $0.83, but the company reported a GAAP loss per share of $0.52. DowDuPont posted a loss from continuing operations of $2.87 billion, due to a restructuring and goodwill impairment charge of $3.1 billion. Wall Street was not happy with the news, sending the stock trading lower this morning.
The company experienced solid top-line performance across its operating segments and geographies. The Agriculture segment benefited from modest volume and currency improvements, though this was partly offset by local price declines. The Performance Materials & Coatings operation experienced a healthy increase in pricing and moderate volume growth. Meanwhile, the Industrial Intermediates & Infrastructure business posted impressive sales gains in all geographic regions. Elsewhere, the Packaging & Specialty Plastics line benefited from healthy consumer-led demand across key end-markets. The Electronics & Imaging operation capitalized on robust demand for mobile phones and other consumer electronics. Moreover, increased semiconductor content in end-use applications also provided support, though this was partly offset by a decline in sales of photovoltaics. In addition, greater demand for bioactives and microbial control solutions, along with continued growth in probiotics and pharmaceuticals, benefited the top line at the Nutrition & Biosciences operation. Finally, the Safety & Construction business experienced solid demand across construction, medical packaging, and industrial markets.
Looking forward, robust fundamentals augur well for future performance here. Leading indicators in developed economies suggest broad-based growth going forward. U.S. tax reform will likely act as a catalyst for domestic capital investments, and an emerging middle class in developing economies ought to support sustainable growth. We have increased our top-line estimate for full-year 2018, and now anticipate sales of $85 billion. We expect strong bottom-line improvement going forward. That said, we have reduced our bottom-line call for the current year by $0.70, to $3.00, in light of the share deficit generated in the recent period.
— Michael Napoli
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
