DowDuPont profit beats Street for fourth straight quarter

[August 02, 2018]  By Laharee Chatterjee and Nivedita Bhattacharjee

(Reuters) - U.S. chemicals producer DowDuPont Inc <DWDP.N> reported better-than-expected profit for the fourth straight quarter, driven by higher prices and strong demand for its products including paints and packaging materials.

The Dow logo is seen on a building in downtown Midland, Michigan, in this May 14, 2015 file photograph. REUTERS/Rebecca Cook/File Photo

The company, formed after chemical giants Dow Chemical and DuPont merged last year, has launched new packing materials, components for laundry detergents and a new seed variety, Chief Financial Officer Howard Ungerleider said on a call before earnings.

He also said the company, which has global operations and often sources materials locally, does not expect any tariff-related impact on business this year.

Sales from the company's biggest revenue generator - materials science business, which makes chemicals used in cosmetics, packaging material, and brake fluids, rose 18 percent to $12.6 billion for the second quarter.

"Our new product launches are resonating with customers, resulting in strong demand across each of our targeted end-markets," DowDuPont CEO Ed Breen said.

Sales from its agricultural business rose 25 percent to $5.7 billion. Cold weather in the northern hemisphere moved demand for the company's seeds from April to May.

The agriculture unit, a weak spot in earlier quarters, has struggled due to higher production and slowing demand.

In April, DowDuPont said the unit could be affected by the escalating U.S.-China trade conflict, after Beijing announced new tariffs on imports of U.S. soybeans and other goods.

The company said overall prices rose 4 percent in the quarter, including a 5 percent increase in materials science business and a 4 percent price rise in agriculture.

Net sales rose 17 percent to $24.2 billion, which the company said compares with net sales of $20.7 billion that DowDuPont would have made had it been one company in the same quarter a year earlier.

Adjusted earnings came in at $1.37 per share, an increase of 41 percent.

Analysts on average were expecting the company to report a profit of $1.30 per share on revenue of $23.6 billion, according to Thomson Reuters I/B/E/S.

Dow and DuPont completed their $130 billion merger last September. It then made changes to operations in the three units it plans to create, under pressure from investors to run the business more efficiently.

(Reporting by Laharee Chatterjee and Nivedita Bhattacharjee in Bengaluru; Editing by Supriya Kurane)

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