DuPont reported stronger results in the second quarter as cost-cutting efforts took hold.
The company is preparing for a merger into Dow, with the combined companies spinning off three businesses, including the agriculture segment into publicly traded companies. Two of the three businesses are expected to be based in Delaware.
Generally Accepted Accounting Principles earnings (GAPP) totaled $1.16 a share compared to $1.06 a share a year earlier. Operating earnings were up 14 percent.
Sales were $7.1 billion, up 2 percent in volume. However, currency adjustments resulted in a 3 percent decline.
Agriculture sales reflected 3-percent volume growth, driven by higher corn seed and insecticide sales, partially offset by lower soybean volumes in North America. Volume growth was offset by negative impacts from currency and other factors.
Profit margins were up 1 percent, with operating margins rising about 2. 5 percent. Corporate expenses were down 26 percent.
DuPont expects full-year 2016 GAAP earnings to be in the range of $2.70 – $2.75 a share and has increased the low-end of its previous 2016 operating earnings range by 10 cents per share to $3.15 – $3.20 per share.
“Our continued focus on our plan delivered strong results. Solid execution enabled volume growth of 2 percent, and we expanded operating margins across all reportable segments. Cost savings, mix enrichment from new technologies and lower product costs contributed to the margin expansion. Continued progress on our cost savings program keeps us on track to reach $1 billion on a run-rate basis by year-end,” said Edward Breen, CEO of DuPont. “We are pleased with the overwhelming vote of approval the merger received from our shareholders. We are preparing to hit the ground running immediately after closing, which we continue to expect later this year as we work closely with regulators in all relevant jurisdictions. We look forward to standing up three strong businesses and enhancing our ability to offer innovative, value-added solutions and increased choice to our customers.”
Under Breen, DuPont has cut 1,700 jobs in Delaware. Two of three headquarters of the companies to be spun off from DuPont and Dow, including agriculture, will be based in Delaware. However, many operating headquarters jobs will remain elsewhere.
The spin-off is expected to take a couple of years.
