DuPont reported lower earnings in the second quarter as the company moved ahead with a plan to reduce overhead costs and spin off its Performance Chemicals business.
The company earlier lowered its earnings forecast, due to what it said was a temporary weakness in its key agricultural business.
Operating earnings per share of $1.17 were down from $1.28 per share last year, in-line with the company’s earlier earnings warning.
“While lower Agriculture earnings impacted our results this quarter, we continue to see strong science-driven growth in this segment over the long term. We are steadily advancing DuPont’s strategy to build and strengthen world-leading positions in agriculture and nutrition, bio-based industrials and advanced materials,” said DuPont CEO Ellen Kullman. “As we move ahead with our Performance Chemicals separation, we also have launched the initial stage of a broad initiative to reset our operating model. This work is already gaining traction and will continue to expand, positioning DuPont to drive greater growth and value with a simplified, streamlined support structure and a smaller cost base – consistent with the purpose, strategy and needs of the DuPont company, post-separation.”
Revenue was $9.7 billion compared to $9.8 billion in the same period last year. Volume growth in the key Crop Protection, Nutrition & Health and most industrial businesses was offset by the impact of portfolio changes, a planned maintenance shutdown and lower corn seed volumes.
Strong operating earnings growth in the quarter was delivered by Industrial Biosciences ( ahead 37 percent), Nutrition & Health ( up 72 percent) and Safety & Protection ( plus 22 percent).
The redesign initiative announced on June 26th to reset the company’s operating model is under way across all businesses and support functions. The Performance Chemicals separation remains on track for mid-2015, the company announced.
The company also announced today a 4 percent increase in its third quarter dividend, its third increase in the past 27 months.
Supplied was a summary of business results for each of the company’s reportable segments in the second quarter compared to the current period with the prior year.
Agriculture – Operating earnings of $836 million declined $105 million, or 11 percent, on lower corn seed volumes, lower North America herbicide volumes and higher seed inventory write-downs. This was partially offset by higher seed prices, higher insecticide volumes, higher soybean volumes and lower seed input costs.
Electronics & Communications – Operating earnings of $89 million declined $6 million, or 6 percent. Sales volumes grew in consumer electronics and operating earnings benefited from productivity improvements. However, the prior year included $20 million of OLED licensing income.
Industrial Biosciences – Operating earnings of $59 million increased $16 million, or 37 percent, from continued strong enzyme demand for animal nutrition, food and ethanol production. This was partially offset by lower sales for Sorona polymer for carpeting.
Nutrition & Health – Operating earnings of $105 million increased $44 million, or 72 percent, from broad based volume growth and improved mix, lower raw material costs, productivity gains and the absence of one-time costs in the prior year.
Performance Chemicals – Operating earnings of $251 million were down $17 million, or 6 percent, due primarily to lower prices for refrigerants and fluoropolymers, partially offset by productivity improvements.
Performance Materials – Operating earnings of $303 million decreased $29 million, or 9 percent. Gains from strong Performance Polymers volumes into global automotive markets were offset by a scheduled maintenance shutdown at the company’s Orange, Texas ethylene unit. Absent that shutdown, segment operating earnings would have increased.
Safety & Protection – Operating earnings of $209 million increased $37 million, or 22 percent, primarily due to higher volumes in Protection Technologies, lower product costs and productivity improvements.
