DowDuPont Feels the Currency Heat in Q4—Down More than 8% Today



DowDuPont’s fourth-quarter results

DowDuPont (DWDP) announced its fourth-quarter earnings results on January 31, 2019. The company reported revenue of ~$20.10 billion, indicating that its sales had remained flat compared to the fourth quarter of 2017. Its revenue fell short of analysts’ expectation of $20.92 billion.

DowDuPont’s revenue rose across all of its reporting segments except the Materials Science segment, which fell 1%. Its volumes rose 1%, and higher prices helped its revenue rise 1%. However, unfavorable foreign currency had an adverse impact of 2% on DWDP’s revenue.

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Fourth-quarter adjusted EPS

DowDuPont reported adjusted EPS of $0.88 in the quarter, a rise of 6.0% compared to the fourth quarter of 2017. DowDuPont managed to just meet analysts’ estimates. Its adjusted EPS excluded $0.56 per share worth of significant items and $0.11 per share related to the amortization of intangibles. DowDuPont’s adjusted EPS rose due to cost synergies, its lower tax rate, and share buybacks.

Other highlights

  • The company’s cash flows from operations stood at $5.1 billion compared to $1.8 billion in the fourth quarter of 2017.
  • Its cost-saving synergy for the quarter was $500 million.
  • DWDP bought back $1.4 billion worth of common stock during the quarter.

Guidance and stock price

DowDuPont forecast a fall in its first-quarter revenue across all of its segments driven by unfavorable foreign currency exchange.

As of 2:15 PM EST, DowDuPont has fallen 8.4% so far today. Eastman Chemical (EMN), LyondellBasell (LYB), and Celanese (CE) have fallen 2.2%, 1.9%, and 2.0%, respectively.

Investors can gain indirect exposure to DowDuPont by investing in the iShares U.S. Basic Materials ETF (IYM). IYM holds 20.6% of its portfolio in DowDuPont.

Soon, we’ll provide a detailed report on DowDuPont’s fourth-quarter earnings. Stay tuned!


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