DuPont’s Nutrition and Health segment in 2Q17

DuPont’s (DD) Nutrition and Health segment is the company’s third-largest revenue generator. The segment accounted for 11.0% of DuPont’s revenue in 2Q17—compared to 11.80% in 2Q16. It was a big fall in terms of revenue contribution. The Nutrition and Health segment reported revenue of $818 million—a decrease of 2.0% on a YoY (year-over-year) basis. In 2Q16, the segment’s revenue stood at $835 million.

Analyzing DuPont’s Nutrition and Health Segment in 2Q17

The segment’s revenue fell primarily due to lower volumes in systems and texturants and protein solutions. The decision to exit a few low margin markets had a negative impact on the segment’s revenue. On the other hand, probiotics witnessed tremendous growth of more than 20% in 2Q17. The growth was primarily due to higher demand in Asia-Pacific and North America.

Operating income and margins

The segment’s operating income was $135 million in 2Q17—an increase of 3.80% on a YoY basis. In 2Q16, the segment’s operating income stood at $135 million. The rise in the segment’s operating income was primarily due to strong growth in probiotics. By exiting the lower margin business, the segment’s margin also improved.

The Nutrition and Health segment reported an operating margin of 16.50% compared to 15.60% in 2Q16—an increase in the margin by 90 basis points on a YoY basis.

Investors looking for exposure to DuPont can invest in the ProShares Ultra Basic Materials (UYM), which has invested 7.70% of its portfolio in DuPont. The fund has also invested in Praxair (PX), Ecolab (ECL), and Air Products and Chemical (APD) with weights of 4.0%, 3.6%, and 3.30%, respectively, as of July 25, 2017.

In the next part, we’ll discuss how the Protection Solutions segment performed in 2Q17.

Latest articles

German chip maker Infineon Technologies has reportedly raised 1.55 billion euros (~$1.74 billion) in capital by selling its shares to fund its acquisition of Cypress Semiconductor (CY). Infineon has sold ~113 million new shares at 13.70 euros each.

As of June 18, Dunkin’ Brands (DNKN) was trading at $80.07, an 8.9% rise since reporting its first-quarter earnings on May 2. Also, DNKN was trading at a premium of 29.8% from its 52-week low of $61.69 and a discount of 1.6% from its 52-week high of $81.40.

19 Jun

Are Lower Oil Prices Weighing on ExxonMobil Stock?

WRITTEN BY Maitali Ramkumar

ExxonMobil (XOM) stock has fallen 7.1% in the second quarter so far. Let's review ExxonMobil's stock performance in comparison to oil price changes and equity market movements in the quarter.

19 Jun

As Facebook Unveils Libra, MSFT and CRM Join a Blockchain Group

WRITTEN BY Mayur Sontakke, CFA, FRM

On June 18, Facebook (FB) launched Libra, its own cryptocurrency. On the same day, CoinDesk published another piece of blockchain news that didn’t receive as much fanfare as Facebook’s Libra news. Was the timing a coincidence? We think not.

Uber Technologies (UBER) has picked Melbourne as another test site for its flying taxi service known as UberAir. The Australian city is the first international test site Uber has chosen for its flying taxi service. The addition of Melbourne brings the number of test locations Uber has picked for its UberAir service to three.

Lyft (LYFT) and Uber Technologies (UBER) are pushing back against California legislation that would require them to recognize their drivers as employees rather than independent contractors. The legislation would require companies like Lyft to give their drivers the compensation and benefits spelled out under California’s employment regulations.