DowDuPont Reports Q2 2018 Earnings: Beats Estimates, Stock in Red

DowDuPont’s Q2 2018 revenue

DowDuPont (DWDP) announced its Q2 2018 earnings today, August 2. Its revenues were ~$24.24 billion, a growth of 17% over Q2 2017 pro forma revenues from continuing operations. It beat Wall Street analysts’ estimates of $23.59 billion.

DWDP’s revenue grew across all its reporting segments. The Agriculture segment led with 25% revenue growth, driven by lower spillover sales in the first quarter due to weather-related issues. The Performance Materials segment grew 15%, and Specialty Products grew 10%. Volume grew 10%, and prices grew 4%.

DowDuPont Reports Q2 2018 Earnings: Beats Estimates, Stock in Red

Q2 2018 adjusted EPS

DowDuPont reported adjusted EPS of $1.37, an increase of 41% over pro forma adjusted EPS of $0.97 in Q2 2017. It beat analysts’ estimate of $1.30. Adjusted EPS excludes charges and amortization of intangible assets. Its adjusted EPS grew on higher volumes, better prices, $375 million in cost-saving synergies, equity earnings, favorable currency, share buybacks, and a lower tax rate.

Guidance and stock price

DWDP is optimistic about the economic activity around the globe. As a result, it expects its revenue to grow more than 10% in the third quarter and has projected operating EBITDA of 12% year-over-year.

The earnings beat failed to boost the stock as tariff fears loomed. As of August 2, DWDP was trading at -2.7%. Its peers Eastman Chemical (EMN), LyondellBasell (LYB), and Celanese (CE) were trading at 1.25%, 1.5%, and 1.4%, respectively.

Investors can get indirect exposure to DowDuPont by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has 23.6% of its portfolio in DowDuPont.