DuPont’s Industrial Biosciences segment in 1Q17
DuPont’s (DD) Industrial Biosciences segment, its smallest revenue contributor, accounted 4.8% in 1Q17. The segment reported revenue of $368 million in 1Q17, an increase of 4.5% from the $352 million seen in 1Q16.
Increased demand of biomaterials for carpeting and new product launches in bioactives boosted sales volumes. However, revenue was impacted due to lower volumes in the animal nutrition business.
Operating earnings and margin
The Industrial Biosciences segment reported a net income of $75 million in 1Q17, compared with $63 million in 1Q16, an increase of 19% YoY (year-over-year). The segment’s margin improved from 17.9% in 1Q16 to 20.4% in 1Q17, an increase of 250 basis points YoY. The segment’s income and margin improvements were primarily due to joint ventures and cost savings.
The segment is expected to see volume growth from new product launches in the bioactives space and the continued demand for biomaterials in apparel and carpeting. Investors can indirectly hold DuPont by investing in the Vanguard Materials ETF (VAW), which has invested an 8.5% exposure to DuPont. Other top holdings of the fund include The Dow Chemical Company (DOW), Monsanto (MON), and Praxair (PX), which had weights of 8.6%, 6.1%, and 4.2%, respectively, as of April 25, 2017. In the next part, we’ll look at the Nutrition & Health segment’s performance in 1Q17.