DuPont Reports Earnings Gain as Lower Costs Offset Volume Declines
2019-11-01    []


DuPont reported third-quarter net income of $372 million, up from $88 million in the same year-ago period due mainly to cost savings and lower integration and separation costs related the DowDuPont merger and subsequent separation of Dow and Corteva. Operating EBITDA of $1.4 billion was down 4% year on year (YOY). 

Net sales of $5.4 billion fell 5% YOY. Net sales on an organic basis were down 2% YOY with 1% higher price being more than offset by 3% lower volume. US and Canada volumes were flat, Asia Pacific volumes were down 4%, and Europe, Mideast, and Africa volumes were down 3%.  

Reported adjusted earnings of 96 cts/share were up 2% YOY and 1 ct above analyst estimates. Earnings per share were higher on reduced share count and lower depreciation and amortization costs, which more than offset negative currency impacts and volume declines.

“Amid ongoing challenged market conditions and currency headwinds, we delivered earnings per share growth and expanded margins through continued price improvement, cost discipline, and portfolio actions,” said Marc Doyle, DuPont CEO.

DuPont narrowed the range for full-year earnings guidance to $3.77–3.82/share from the prior guidance of $3.75–3.85/share, leaving the midpoint of guidance unchanged. 

Segment results

Electronics and Imaging segment operating EBITDA was $320 million, a decrease of 1% as a gain associated with a planned asset sale was more than offset by unfavorable product mix. Segment net sales of $934 million were down 1%. Organic sales were down 1% with a 1% decline in price as volumes were flat.

Nutrition and biosciences operating EBITDA was $360 million, a decrease of 1% YOY with the decline attributable to the June 2019 divestiture of its natural colors business. Pricing gains and cost savings offset the impact of unfavorable product mix and currency headwinds. Net sales of $1.5 billion were down 1%. Organic sales were up 2% with price and volume each improving 1%.

Transportation and industrial operating EBITDA was $306 million, a decrease of 20% YOY with pricing gains and cost reductions more than offset by the impact from lower volumes and currency headwinds. Segment net sales of $1.2 billion were down 11%. Organic sales were down 10% with a 1% price improvement more than offset by an 11% volume decline. Volumes declined due to lower auto builds, weak electronics demand, and continued destocking in the automotive channel. Both Europe and Asia volumes were down low teens as the impact from China tariffs coupled with inventory destocking impacted demand, DuPont said.

Safety and construction operating EBITDA was $352 million, an increase of 1% YOY with pricing gains more than offsetting higher manufacturing costs. Segment net sales of $1.3 billion were down 3% YOY. Organic sales increased 2% with a 3% price improvement offset by a 1% volume decline. The December 2018 divestiture of the European Styrofoam business reduced sales by 4%.

Non-core segment operating EBITDA for the segment was $88 million, an increase of 2% YOY with a gain on the sale of DuPont Sustainable Solutions and continued cost productivity offsetting the impact of lower volumes. Non-core reported net sales of $431 million were down 12% from the year-ago period. Organic sales were down 8% driven by 10% volume declines offset by 2% pricing gains. 


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