Analysts Expect DowDuPont’s Revenues to Increase in Q4

DowDuPont’s fourth-quarter revenue estimates

DowDuPont (DWDP) is expected to report revenues of $20.92 billion in the fourth quarter—an increase of ~4.3% compared to the revenues in the fourth quarter of 2017. The company’s revenues were $20.06 billion in the fourth quarter of 2017. Since the merger, the fourth-quarter earnings are DowDuPont’s fifth full-quarter earnings.

Analysts Expect DowDuPont’s Revenues to Increase in Q4

Driving factors

DowDuPont’s projected revenue growth is expected to be driven by improvements in all of its reporting segments. The Agriculture segment will likely remain flat. However, new launches could drive the company’s growth. The positive development in US-China trade relations and the approval of genetically modified soybean and canola crops could drive the segment’s future growth. The Material Science segment is expected to have low double-digit percentage growth. The Specialty Products segment will likely have higher single-digit percentage growth due to higher volumes and higher prices.

However, the biggest challenge for DowDuPont is an unfavorable foreign currency, which could have a negative impact on its revenues. The US Dollar Index, which measures the dollar’s movement against the basket of currencies, has gained 1.8% in the past six months. We’ll have to wait and see if DowDuPont’s revenues can overcome analysts’ expectations in the fourth quarter.

Investors could get indirect exposure to DowDuPont by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 22.0% of its portfolio in DowDuPont. IYM also provides exposure to Linde (LIN), LyondellBasell (LYB), and Air Products and Chemicals (APD) with weights of 14.6%, 4.5%, and 5.9%, respectively, as of January 28.