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Why Analysts Expect DuPont’s Revenues to Turn Around in 1Q17

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DuPont’s 1Q17 revenue estimates

Analysts expect DuPont’s (DD) revenue to rise on a year-over-year (or YOY) basis in 1Q17. The expected increase in DD’s revenue marks a trend reversal in first quarter revenues since 2012. DD’s first quarter revenues have been on a declining trend since 2012 from $11.3 billion to $7.4 billion in 1Q16. Analysts expect DuPont to post $7.5 billion in 1Q17, an increase of 1.4% year-over-year.

What could drive DuPont’s revenue up?

The expected increase in DuPont’s 1Q17 revenue is primarily driven by the headwinds in the agriculture segment due to a change in the timing of seed delivery to the southern US. DD’s Leptra insecticide is expected to continue its good performance due to new launches of the herbicide. Also, the weakness of the US dollar against the basket of currencies and also against South American currencies is expected to help increase DuPont’s revenue.

DuPont’s Performance Materials segment is expected to grow primarily due to the continued strong demand in the global automotive market. On the other hand, inventory reduction and the slowdown in its Protection Solution segment could affect DuPont’s overall revenue adversely.

Investors can hold DuPont indirectly by investing in the First Trust Indxx Global Agriculture ETF (FTAG), which invests 9.6% of its holdings in DuPont. The other top holdings of the fund include Dow Chemical (DOW), Syngenta (SYT), and Monsanto (MON), which have weights of 9.6%, 4.6%, and 4.5%, respectively, as of April 17, 2017.

In the next part, we’ll look into analysts’ earnings estimates for DuPont in 1Q17.

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