Diversified-chemicals manufacturer and Dow-30 component DowDuPont (DWDP – Free DowDuPont Stock Report) has reported fourth-quarter earnings. Sales of about $20.1 billion roughly matched the prior-year figure, as price and volume gains were offset by unfavorable currency movements. Earnings per share came in at $0.77, slightly ahead of the year-ago figure of $0.74. Efforts by the company to reduce costs have supported profitability.
The Agriculture division benefited from sales of new crop protection products and the timing of seed shipments in the Americas, though this was partly offset by currency pressures. The top line declined slightly at the Performance Materials & Coatings business, as sales gains in most areas were erased by a decline in the Asia/Pacific region. The Industrial Intermediates & Infrastructure line reported moderate sales growth, thanks to strength in Asian and North American markets. Meanwhile, the Packaging & Specialty Plastics operation benefited from demand in Asian and Latin American markets as well as new capacity from the Sadara joint venture and the U.S. Gulf Coast. However, this was nullified by weakness in North America, and total sales fell roughly 4% here. Elsewhere, the Electronics & Imaging business benefited from robust demand in chemical mechanical planarization and advanced packaging end-markets as well as healthy gains in display technologies. But, ongoing softness in the photovoltaics market and lower interconnect solutions volumes impacted performance here. In addition, the Nutrition & Biosciences unit experienced healthy growth in probiotics and strong performance in systems & texturants. Results were particularly healthy in the Asia/Pacific region. Finally, the Safety & Construction business was helped by continued strength across industrial, oil & gas, aerospace, and life & personal protection end-markets. This resulted in strong volume advances in Nomex fibers and Kevlar high-strength materials, which more than offset softness in domestic residential construction demand.
The company expects that global economic expansion will continue in the current year, though at a somewhat slower pace. We have lowered our estimates slightly for full-year 2019, and now anticipate sales and earnings per share of $92 billion and $4.30, respectively.
The separation of DowDuPont into three standalone entities remains on track. The split of the Materials Science division is scheduled for April 1st. This operation will be called Dow. Corteva Agriscience is expected to be separated from the new DuPont on June 1st. DuPont will house the Specialty Products division. The senior leadership teams for the three businesses have been announced, as well as the boards of directors.
Investors were not happy with the latest results, and sent the stock trading lower on today's news.
- Michael Napoli
