| DuPont Earnings Top, Agriculture Weakness & FX Hit Profit | |
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DuPont DD beat earnings expectations in the third quarter of 2015, but saw its revenues and profits tumble in the quarter on weak results in its agriculture business, currency headwinds and softness in emerging markets.
DuPont logged adjusted (barring one-time items) earnings of 13 cents per share in the reported quarter versus 39 cents per share registered a year ago. It surpassed the Zacks Consensus Estimate of 10 cents. The better-than-expected results came on the back of cost savings from the company’s operational redesign actions that added 10 cents to its earnings. On a reported basis, DuPont logged earnings from continuing operations of 14 cents per share in the quarter, a roughly 61% fall from 36 cents per share a year ago. Consolidated profit tumbled around 46% year over year to $235 million or 26 cents per share. Bigger operating loss in the company’s agriculture business hurt the bottom line. The results also include a 17 cents per share impact from unfavorable currency translation.
DuPont raked in net sales of $4,873 million for the quarter, a roughly 17% year over year decline. Headwinds from a stronger dollar and a sharp decline in sales in the agriculture business battered the company’s top line. Declines were witnessed across all segments in the quarter. Sales fell short of the Zacks Consensus Estimate of $5,220 million. DuPont backed its recently revised earnings guidance for the full year. The Delaware-based company’s shares slipped 1.7% in early trading. EI Du Pont De Nemours and Company - Earnings Surprise | FindTheBest Segment Review Agriculture: Revenues slid 30% year over year to around $1 billion in the reported quarter. Segment operating loss shot up to $210 million from $56 million a year ago as better productivity, higher pricing and gains from asset sales were more than offset by unfavorable currency impact and lower volumes.
Electronics & Communications: Sales went down around 14% to $532 million in the quarter. Operating earnings for the segment rose 16% year over year to $104 million on productivity improvements and cost savings.
Industrial Biosciences: Sales fell 3% to $305 million. Earnings jumped 24% to $52 million as higher volumes and gains from cost reduction more than offset currency impact and lower pricing. Nutrition & Health: Sales slipped 10% to $810 million. Operating earnings went up 3% to $102 million as gains from productivity and cost reduction actions more than offset currency impact.
Performance Materials: Sales went down roughly 15% to around $1.3 billion. Operating earnings slipped 13% to $317 million as reduced ethylene volumes and prices coupled with unfavorable currency impact more than offset productivity gains and cost savings.
Safety & Protection: Sales fell 15% to $831 million. Operating earnings slid 20% to $156 million as unfavorable currency impact, lower demand and portfolio changes more than offset productivity improvements and cost reductions.
Financials DuPont ended the quarter with cash and cash equivalents of roughly $3.3 billion, down around 17% year over year. Total borrowings and capital lease obligations fell nearly 25% year over year to around $9.9 billion.
DuPont launched a $2 billion accelerated share repurchase program in the third quarter.
Outlook
DuPont reaffirmed its adjusted earnings forecast of roughly $2.75 per share for 2015, which it reduced from the prior view of $3.10 a share earlier this month. The outlook reflects continued strengthening of the greenback versus currencies in emerging markets, mainly the Brazilian real, and softness in the agricultural markets. Unfavorable currency impact on full-year earnings is expected to be 72 cents per share. The current Zacks Consensus Estimate for 2015 is $2.93.
Edward Breen, who took over as Interim Chair and CEO of DuPont following the retirement of Ellen Kullman on Oct 16, noted that the company will take a fresh look at its cost structure and capital allocation strategy to improve returns to shareholders amid the prevailing difficult operating backdrop.
DuPont has accelerated its operational redesign cost reduction actions and now expects to attain $1.3 billion of cost savings on a run rate basis by the end of the next year, a year ahead of earlier expectations. DuPont is also targeting additional cost savings of roughly $1.6 billion by end-2017. The company’s operational redesign initiatives are also expected to deliver savings of around 40 cents per share in 2015.
As part of its portfolio optimization actions, DuPont completed the separation of its struggling performance chemicals unit in Jul 2015 through the spin-off of The Chemours Company CC, a leading manufacturer of titanium dioxide (TiO2). The separation marked DuPont's transformation to a company which is more growth-driven, more science intensive and less cyclical.
However, DuPont remains exposed to a challenging operating environment in the agricultural market. Lower insect pressure and reduced seed volumes are contributing to a weakening demand for crop protection products. DuPont also faces significant currency headwinds. A stronger U.S. dollar is expected to considerably weigh on its top line in 2015.
DuPont currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked companies in the diversified chemical space include Celanese Corp. CE and Orion Engineered Carbons SA OEC, both carrying a Zacks Rank #1 (Strong Buy).
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du Pont de Nemours and Co
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CODE : DUPP.PA |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
du Pont de Nemours est une société basée aux Etats-Unis D'Amerique. du Pont de Nemours est cotée en France. Sa capitalisation boursière aujourd'hui est 49,7 milliards €UR (55,5 milliards US$, 49,6 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2009 à 10,03 €UR, et son plus haut niveau récent le 20 mars 2015 à 72,47 €UR. du Pont de Nemours possède 876 409 984 actions en circulation. |