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DuPont Reports Fourth-Quarter and Full-Year Results
 

UAE, January 25, 2016– DuPont (NYSE: DD), a science company that brings world-class, innovative products, materials, and services to the global marketplace, announced fourth-quarter 2016 GAAP earnings of $0.29 per share and operating earnings2 of $0.51 per share.  Prior year GAAP and operating earnings2 were a loss of $(0.26) and earnings of $0.27 per share, respectively.  GAAP income from continuing operations before taxes was $353 million, including charges of $(599) million related to an asset impairment charge and transaction costs offset by a $382 million non-operating pension/OPEB gain.  Prior year GAAP loss from continuing operations before taxes was $(421) million, including a $(775) million charge for restructuring costs.

For the full-year 2016, DuPont delivered GAAP earnings of $2.85 per share and operating earnings2 of $3.35 per share.  Prior-year GAAP and operating earnings2 were $2.09 and $2.77 per share, respectively. 

Fourth-quarter sales were $5.2 billion, down 2 percent versus prior year as a 1-percent benefit from currency was offset by a 2-percent decline in local price and a 1-percent decline in volume.  Volume declined as growth in Performance Materials, Electronics & Communications and Industrial Biosciences was more than offset by declines in Agriculture, due to timing of fourth-quarter seed sales primarily due to the southern U.S. route-to-market change.  Excluding this timing change, sales would have increased 2 percent. Full-year sales totaled $24.6 billion, down 2 percent versus prior year due to a 1-percent negative impact from currency and a 1-percent decline in local price. Volume was flat as growth in Performance Materials, Nutrition & Health and Industrial Biosciences was offset by declines in the other segments.  Excluding the change in timing of fourth-quarter seed sales in Agriculture, sales decreased 1 percent.

Free cash flow4 improvement of $1.6 billion for the year reflected higher earnings, lower capital expenditures, lower tax payments, working capital improvements, and the absence of Chemours cash outflows.

“2016 was an important year for DuPont as we exceeded our expectations for earnings, cost savings, operating margin expansion and free cash flow improvement,” said Ed Breen, chairman and CEO of DuPont. “We made excellent progress on our strategic priorities in 2016 to increase shareholder value, and we will build on this groundwork as we move into 2017. We look forward to closing the merger with Dow and are continuing to have constructive discussions with regulators in key jurisdictions. We now expect the merger to close in the first half of 2017, pending regulatory approval.”

Fourth-Quarter Highlights

GAAP1 earnings per share totaled $0.29 versus a loss of $(0.26) per share in prior year. Operating earnings2 per share nearly doubled to $0.51 from $0.27 in prior year.
Sales of $5.2 billion decreased 2 percent.  Local price declined by 2 percent while currency benefited sales by 1 percent. Volume declined 1 percent as growth in Performance Materials, Electronics & Communications and Industrial Biosciences was more than offset by declines in Agriculture, due to timing of fourth-quarter seed sales primarily due to the southern U.S. route-to-market change.  Excluding this timing change, sales would have increased 2 percent.
Segment operating margins expanded by 305 basis points.
GAAP operating costs3 decreased by 5 percent. Operating costs2, excluding significant items and non-operating pension/OPEB benefits, declined by 9 percent versus prior year.

Full-Year Highlights

GAAP1 earnings per share increased 36 percent to $2.85 from $2.09 in prior year. Operating earnings2 per share increased 21 percent to $3.35 from $2.77 in prior year.
Sales of $24.6 billion decreased 2 percent.  Local price and currency each lowered sales by 1 percent. Volume was flat as growth in Performance Materials, Nutrition & Health and Industrial Biosciences was offset by declines in the other segments.  Excluding the change in timing of fourth-quarter seed sales in Agriculture, sales decreased 1 percent.                  
Total company gross margin expanded 60 basis points, excluding a 70-basis-point benefit from a non-operating pension/OPEB curtailment gain.  Segment operating margins expanded about 200 basis points, with increases in all reportable segments.
GAAP operating costs3 decreased by 5 percent. Operating costs2, excluding significant items and non-operating pension/OPEB costs, declined 11 percent, exceeding the 2016 cost savings commitment.
Free cash flow4 improved $1.6 billion primarily due to higher earnings, lower capital expenditures, lower tax payments, and working capital improvements.
DuPont expects first-quarter 2017 GAAP1 earnings per share to decrease about 18 percent versus prior year.   First-quarter 2017 operating earnings2 per share are expected to increase about 8 percent versus prior year.

The following is a summary of business results for each of the company’s reportable segments comparing fourth quarter and full year with the prior year, unless otherwise noted.

Agriculture – For the fourth-quarter 2016, an operating loss of $19 million improved $35 million, or 65 percent.  A benefit from currency of $78 million and cost savings, were partially offset by timing of seed deliveries, primarily related to the southern U.S. route-to-market change.  Operating margins expanded by about 210 basis points.

Full-year operating earnings of $1,758 million increased $112 million, or 7 percent, as cost savings and lower product costs were partially offset by timing of seed deliveries, primarily related to the southern U.S. route-to-market change and negative currency.  Operating margins expanded by about 170 basis points.

Electronics & Communications – Fourth-quarter 2016 operating earnings of $98 million increased $11 million, or 13 percent, on cost savings and volume growth in Solamet® paste.  Operating margins expanded by about 115 basis points.

Full-year operating earnings of $358 million were even with the prior year as cost savings were offset by lower sales and a $16 million litigation expense.  Sales declined on weakness in consumer electronics markets and decreased demand in the photovoltaic market impacting sales of Tedlar® film. Operating margins expanded by about 90 basis points.

Industrial Biosciences - Fourth-quarter 2016 operating earnings of $67 million decreased $11 million, or 14 percent, primarily due to declines in CleanTech.  Operating margins contracted by about 295 basis points.

Full-year operating earnings of $270 million increased $27 million, or 11 percent, reflecting cost savings and an increase in sales, partly offset by a negative impact from currency. Operating margins expanded by 155 basis points.

Nutrition & Health – Fourth-quarter 2016 operating earnings of $135 million increased $50 million, or 59 percent, on cost savings and a $27 million gain from an asset sale.  Volume was flat as growth in sweeteners and probiotics was offset by declines in protein solutions. Operating margins expanded by 615 basis points.

Full-year operating earnings of $504 million increased $131 million, or 35 percent, on cost savings, volume growth in probiotics and cultures and a $27 million gain from an asset sale. Operating margins expanded by about 400 basis points.

Performance Materials - Fourth-quarter 2016 operating earnings of $328 million increased $47 million, or 17 percent, as lower product costs, cost savings, and increased demand in global automotive markets, more than offset the absence of $33 million in prior year benefits from the sale of a business and tax benefits associated with a manufacturing site.  Operating margins expanded by 275 basis points.

Full-year operating earnings of $1,297 million increased $81 million, or 7 percent as cost savings, increased volumes, and lower product costs, more than offset a $63 million negative impact from currency and the absence of $49 million of benefits from the prior year, comprised of a net benefit from a joint venture, the sale of a business and the realization of tax benefits associated with a manufacturing site. Operating margins expanded by about 180 basis points.

Protection Solutions – Fourth-quarter 2016 operating earnings of $142 million decreased $5 million, or 3 percent, as cost savings were more than offset by higher costs due to lower plant utilization and the negative impact from currency. Operating margins contracted by about 60 basis points.

Full-year operating earnings of $668 million increased $27 million, or 4 percent, as cost savings were partially offset by the impact of lower sales. Operating margins expanded by about 150 basis points.

First-Quarter 2017 Outlook

We expect the merger to close in the first half of 2017, pending regulatory approval. Therefore, only guidance for the first quarter of 2017 is being provided. The company expects first-quarter 2017 GAAP earnings to decrease about 18 percent from prior year.  The company’s first-quarter 2017 GAAP earnings include an expected charge of about $0.15 per share for transaction costs associated with the planned merger with Dow. Prior year GAAP earnings included a net benefit of $0.18 per share from significant items, primarily due to a gain on the sale of an entity. 

First-quarter 2017 operating earnings2 are expected to increase about 8 percent versus prior year driven by benefits from cost savings and the impact of the change in timing for seed deliveries, primarily related to the southern U.S. route-to-market change in Agriculture.  These benefits are anticipated to be partially offset by the expected reduction in planted corn acres in the U.S.

DuPont will hold a conference call and webcast on Tuesday, Jan. 24, 2017, at 8:00 AM ET to discuss this news release.  The webcast and additional presentation materials can be accessed by visiting the company’s investor website (Events & Presentations) at www.investors.dupont.com.  A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 6670063#.  For additional information see the investor center at http://www.dupont.com.

Use of Non-GAAP Measures

This earnings release includes information that does not conform to U.S. generally accepted accounting principles (GAAP) and are considered non-GAAP measures.  These measures include the company’s consolidated results and earnings per share on an operating earnings basis, which excludes significant items and non-operating pension and other postretirement employee benefit costs (operating earnings and operating EPS), total segment pre-tax operating earnings, operating costs and corporate expenses on an operating earnings basis.  Management uses these measures internally for planning, forecasting and evaluating the performance of the company’s segments, including allocating resources and evaluating incentive compensation.  From a liquidity perspective, management uses free cash flow, which is defined as cash provided/used by operating activities less purchases of property, plant and equipment.  Free cash flow is useful to investors and management to evaluate the company’s cash flow and financial performance, and is an integral financial measure used in the company’s financial planning process. Management believes that these non-GAAP measurements are meaningful to investors as they provide insight with respect to ongoing operating results of the company and provide a more useful comparison of year-over-year results.  These non-GAAP measurements supplement our GAAP disclosures and should not be viewed as an alternative to GAAP measures of performance.  Reconciliations of non-GAAP measures to GAAP are provided in schedules A, C and D.  Details of significant items are provided in schedule B.

 

Posted by : Dubai PR Network Editorial Team
Viewed 5154 times
PR Category : Others
Posted on : Wednesday, January 25, 2017  2:57:00 PM UAE local time (GMT+4)
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