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DowDuPont’s 1Q18 Earnings and Revenue Beat Expectations

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DowDuPont’s 1Q18 revenue

DowDuPont (DWDP) reported revenues of ~$21.5 billion for 1Q18 today, reflecting growth of 5.1% over the pro forma revenues of 1Q17 from continuing operations. The company beat Wall Street analysts’ estimates of ~$8.25 billion. DWDP’s revenue grew on good performance from the Material Science division, which increased 17%, while the Specialty Products division grew by 11%. However, the Agriculture division declined 25% due to a shift in cultivation because of the weather. A weak US dollar helped revenue grow 4%.

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1Q18 adjusted EPS

DowDuPont reported adjusted earnings per share of $1.12, an increase of 7% over the pro forma adjusted earnings per share of $1.05 in 1Q17. It beat analysts’ estimation of $1.10. The adjusted EPS excluded several significant items related to inventory step-up amortization, integration, and separation costs, amounting to $0.54 per share. Further, $0.11 related to the amortization of DuPont’s intangible assets. DWDP’s adjusted EPS grew on higher revenue, $300 million in cost-saving synergies, and the buyback of shares. DWDP spent $1 billion on share repurchases during the quarter.

Guidance and stock price

DWDP sees macro trends improving. As a result, DWDP expects its revenue to grow 10% in 2Q18 and has projected its operating EBITDA (earnings before interest, taxes. depreciation, and amortization) to be up 20% YoY.

The stock has declined 0.7% today. However, the fall could be due to the decline in the overall market (DJIA). DWDP was trading at $63.05. DWDP’s peers Monsanto (MON), Eastman Chemical (EMN), and LyondellBasell (LYB) were also trading lower—by 0.3%, 0.6%, and 1.4% respectively.

We’ll soon release a detailed series with more insight into DWDP’s earnings. Stay tuned!

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