Wilmington / DE. (dp) E. I. du Pont de Nemours and Company – DuPont – a science company that brings world-class, innovative products, materials, and services to the global marketplace, announced second-quarter 2016 GAAP earnings of 1.16 USD per share and operating earnings2 of 1.24 USD per share. Prior year GAAP and operating earnings2 were 1.06 USD and 1.09 USD per share, respectively. Refer to Schedule B for details of significant items. Second-quarter 2016 sales totalled 7.1 billion USD, down slightly versus prior year as volume growth of 2 percent was more than offset by pressure from local price, currency and portfolio. Other selected highlights:
- GAAP earnings per share totaled 1.16 USD versus 1.06 USD in prior year. Operating earnings2 per share increased 14 percent to 1.24 USD, including 0.05 USD per share of negative impact from currency.
- Sales of 7.1 billion USD reflected 2-percent volume growth, due to Agriculture, Performance Materials and Nutrition + Health. Local price, currency and portfolio in aggregate negatively impacted sales by 3 percent, resulting in total sales declining 1 percent.
- Agriculture sales reflected 3-percent 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 company gross margins expanded more than 100 basis points. Total segment operating margins increased about 250 basis points, as operating margins expanded in all reportable segments.
- Total segment pre-tax operating earnings2 of 1’613 million USD increased 11 percent, despite approximately 60 million USD of negative impact from currency.
- GAAP operating costs3 declined by approximately 160 million USD. Excluding significant items and non-operating pension/OPEB costs, operating costs2 declined by approximately 220 million USD, a 12-percent reduction versus prior year.
- GAAP corporate expenses declined 26 percent versus prior year. Excluding significant items, corporate expenses2 declined by 65 million USD or 44 percent.
- DuPont now expects full-year 2016 GAAP earnings to be in the range of 2.70 USD to 2.75 USD per share and has increased the low-end of its previous 2016 operating earnings2 range by 0.10 USD per share to 3.15 USD to 3.20 USD per share.
«Our continued focus on our plan delivered strong results. Solid execution enabled volume growth of 2 percent, and we expanded operating margins across all reportable segments. Cost savings, mix enrichment from new technologies and lower product costs contributed to the margin expansion. Continued progress on our cost savings program keeps us on track to reach 1 billion USD 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».
The following is a summary of business results for each of the company’s reportable segments comparing the second quarter with the prior year, unless otherwise noted.
Agriculture – Operating earnings of 865 million USD increased 93 million USD, or 12 percent, on lower product costs, higher volumes and cost savings, partially offset by a 36 million USD negative currency impact. Increased corn seed and insecticide volumes were partially offset by lower soybean volumes. Operating margins expanded by 290 basis points. Excluding the impact of currency, operating earnings increased 17 percent.
Electronics + Communications – Operating earnings of 93 million USD increased 4 million USD, or 4 percent, as cost savings and lower product costs more than offset lower demand in consumer electronics and a 1 million USD negative impact from currency. Operating margins expanded by 200 basis points. Excluding the impact of currency, operating earnings increased 6 percent.
Industrial Biosciences – Operating earnings of 62 million USD increased 12 million USD, or 24 percent, on cost savings partially offset by a 3 million USD negative impact from currency. Sales growth in bioactives due to benefits from new product introductions in home and personal care and increased demand in biomaterials were offset by lower volume in CleanTech. Operating margins expanded by about 350 basis points. Excluding the impact of currency, operating earnings increased 30 percent.
Nutrition + Health – Operating earnings of 130 million USD increased 30 million USD, or 30 percent, on cost savings and broad-based volume growth led by probiotics and specialty proteins. Operating margins expanded by about 350 basis points. Excluding a 3 million USD negative impact from currency, operating earnings increased 33 percent.
Performance Materials – Operating earnings of 325 million USD increased 24 million USD, or 8 percent. Cost savings, increased demand in automotive markets (primarily in China and North America) and increased volumes for ethylene due to a prior year unplanned ethylene outage, were partially offset by a 16 million USD negative impact from currency, as well as costs associated with a contractual claim. Operating margins expanded by over 180 basis points. Excluding the impact of currency, operating earnings increased 13 percent.
Protection Solutions – Operating earnings of 188 million USD increased 7 million USD, or 4 percent, driven by lower product costs and cost savings, partially offset by lower volumes and a 4 million USD negative currency impact. Operating margins expanded by about 150 basis points. Volume declines in Nomex® thermal-resistant fiber and Kevlar® high-strength material were driven by weakness in the oil and gas industry and delays in military spending. Excluding the impact of currency, operating earnings increased 6 percent.
2016 Outlook
The company now expects full-year 2016 GAAP earnings to be in the range of 2.70 USD to 2.75 USD per share and operating earnings2 to be in the range of 3.15 USD to 3.20 USD per share, an increase of 0.10 USD per share to the low-end of its previously communicated range. The estimated negative currency impact for full-year 2016 is now expected to be about 0.15 USD per share. The company continues to expect a benefit of 0.64 USD per share from the 2016 global cost savings and restructuring plan and a headwind from a higher base tax rate in 2016 of about 0.10 USD per share. The company’s full-year 2016 GAAP earnings includes an expected charge of about 0.45 USD 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 percent higher than the prior year.
OTHER TOPICS FROM THIS SECTION FOR YOU:
- Europastry S.A.: shelves IPO plans once again
- Buyers Edge Platform: acquires Parsly Software
- Almarai: announces interim 9M-2024 financial results
- Emmi: completes acquisition of Mademoiselle Desserts
- Luckin Coffee: breaks ground on Innovation and Production Center
- Strong result for Lantmännen in the second tertial 2024
- Pladis: opens new chocolate cafe in Dubai Mall
- Apropos CP Kelco: Tate + Lyle announces additional information
- Lesaffre: acquires a majority stake in Biorigin
- CA-1 Robot: Circus Group Launches Munich Showroom
- Ferrero: opens new production facility in Illinois
- HungryPanda: Raises 55 Million to Accelerate Growth
- McCormick: Reports Third Quarter 2024 Performance
- Subway Sandwiches: Continues to Expand Its Global Presence
- Nissin Foods: Acquires Frozen Food Manufacturer ABC Pastry
- SnackFutures Ventures: makes investment in Doughnut Start-Up
- PepsiCo: To Acquire Siete Foods For 1.2 Billion
- Europastry S.A.: goes public on the Spanish stock exchange
- Insomnia Cookies: Reaches 300 Store Locations Globally
- Reborn Coffee: Announces Joint Venture in Thailand