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DuPont profit beats as lower costs boost margins

DuPont reported a higher-than-expected rise in quarterly profit as lower costs boosted margins, and the chemicals and seeds producer said it expected a 50 percent jump in operating earnings per share in the current quarter from a year earlier.

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Quinn Fenger, a Minnesota State University Moorhead sophomore biology major works as a corn pollinator for DuPont Pioneer. Forum News Service file photo.

DuPont reported a higher-than-expected rise in quarterly profit as lower costs boosted margins, and the chemicals and seeds producer said it expected a 50 percent jump in operating earnings per share in the current quarter from a year earlier.

The company, which is in the process of merging with Dow Chemical Co, raised the low-end of its 2016 operating earnings forecast by 10 cents per share to $3.15. It maintained the upper end at $3.20.

DuPont continues to expect to close the merger later this year as the companies are working closely with regulators in all relevant jurisdictions, Chief Executive Ed Breen said in a statement on Tuesday.

European Union antitrust authorities are expected to rule on the merger by July 28.

Both Dow and DuPont have said that any asset sales required would likely be minor, but pressure to scrutinize the impact of the rapid consolidation in agriculture on farmers and consumers is mounting.

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The chairman of the U.S. Senate Judiciary Committee last month urged federal antitrust officials to conduct a "careful analysis" of the merger between Dow and DuPont.

DuPont and Dow are merging in an all-stock deal, a first step toward breaking up the combined company into three separate businesses focused on agriculture, material science and specialty products.

DuPont, which gets about half of its revenue from outside the United States and Canada, said on Tuesday it now expected a strong dollar to hurt full-year profit by about 15 cents per share, less than the 20 cents it had estimated earlier.

The company is also benefiting from its cost-cutting program, and is on track to reach $1 billion in cost savings on a run-rate basis by year-end.

Net income attributable to the company rose to $1.02 billion, or $1.16 per share, in the second quarter ended June 30 from $940 million, or $1.03 per share, a year earlier.

Excluding items, the company earned $1.24 per share, easily beating analysts' average estimate of $1.10, according to Thomson Reuters I/B/E/S.

Net sales fell 0.8 percent to $7.06 billion, but beat analysts' expectation of $7.01 billion. 

Related Topics: AGRIBUSINESS
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