Diversified chemicals manufacturer and Dow-30 component DuPont (DD - Free DuPont Stock Report) has reported its first-quarter earnings. The top line increased roughly 5%, to $7.7 billion. This was largely due to moderate volume growth. Earnings per share jumped 30% from the prior-year tally, to $1.64. These shares moved moderately higher, in response.
Performance was favorable in most segments. The Agriculture business reported growth in operating earnings of 12%. This line experienced pricing growth, thanks to the success of the company's newest corn hybrids in Brazil and greater sunflower seed sales in Europe. The Electronics & Communications business benefited from greater demand in consumer electronics and semiconductor markets, logging a 51% improvement in operating earnings. Meanwhile, results at the Industrial Biosciences line were supported by volume growth, improved joint venture performance, and cost savings, though this was partly offset by weakness at the CleanTech operation. Still, operating earnings increased 19% here. Elsewhere, the Nutrition & Health segment benefited from greater productivity and volume growth in probiotics and emulsifiers, though this was partly offset by declines in other areas. Finally, increased volume at the Performance Materials line was the result of greater demand for polymers in automotive markets and specialty copolymers growth, though lower ethylene sales provided a partial offset. Still, operating earnings advanced 30% here.
Looking forward, sales at DuPont should continue to benefit from strength in global automotive markets and the favorable impact from a change in the timing of seed deliveries. The company expects earnings per share for the first half of the year to be about $2.90, which would mark a 16% advance from the $2.50 earned in the corresponding period of the prior year. We have increased our estimates for full-year 2017, and now expect sales and share earnings of $26 billion and $3.90, respectively. That said, DuPont's merger with Dow Chemical (DOW) appears likely to close in August. The new entity would be called DowDuPont. Assuming completion, the combination would create leading businesses in agriculture, specialty products, and materials science. These would then be separated into three independent, publicly traded companies through tax-free spinoffs, which would likely occur 18 months or so after closing of the merger.
About The Company: Du Pont is engaged in science and technology in a range of disciplines, including high performance materials, electronics, safety and security, and biotechnology. The company operates on a global scale, manufacturing a wide range of products for distribution and sale to many different markets, including automotive, construction, agricultural, medical, protective apparel, electronics and nutrition.
