DowDuPont 1st quarter agriculture earnings to take hit from Midwest flooding

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DowDuPont confirmed thattotal company results for the first quarter remain in line with the guidance provided in late March.

Specialty Products anticipates better than expected results. Materials Science results are expected to be in line with its updated guidance; and Agriculture is expected to report results that are lower than previous guidance, due to the longer than expected impact of severe weather-related conditions.

Specialty Products will be spun off later this year under the DuPont name, with Agriculture spinning off under the Corteva name. Materials Science has been spun off under the Dow name.

Specialty Products (DuPont) and Agriculture (Corteva) will be based in northern Delaware, with Dow based in Midland, MI.

Due to flooding in the Midwest and lower seed sales, Corteva is expected to generate $25 to $35 million less in EBIDTA (earnings before interest, depreciation, taxes, and amortization). The ag division expects to record net sales of $3.4 billion and operating EBITDA of about $665 million, down 11 and 25 percent versus the same quarter last year.

For the first half of 2019, the division anticipates net sales to be down low-single digits percent and operating EBITDA to be 3 to 5 percent below the same period last year. Deliveries are on track with current expectations and the revised first half guidance reflects the possibility of reduced planted acres overall, lower than anticipated corn acres, and continued delays to the start of the planting season due to additional bad weather.

The division confirms full-year guidance or organic sales up low-single digits percent and operating EBITDA of about $2.8 billion. The division expects to overcome the first half decline through the realization of price and volume opportunities on high demand products and new product launches and accelerated cost synergy delivery, resulting in an improvement in second half performance versus the prior year.
Specialty Products (DuPont)expects to record net sales of $5.4 billion and operating EBITDA of $1.6 billion, down 3 percent and flat, respectively, with the prior year period. The division had previously expected both net sales and operating EBITDA to be down low-single digits..
Materials Science (Dow) expects to record results that are in line with its updated guidance – net sales of $10.8 billion and operating EBITDA of $1.9 billion, down 10 percent and 24 percent, respectively, from the same period a year ago.

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