DuPont announced second quarter 2015 operating earnings of US$1.18 per share, compared to US$1.17 per share recorded in the same period a year earlier. GAAP1 earnings were US$1.03 per share, compared to US$1.15 per share in the prior year.
Second quarter sales were US$8.6 billion, down 11% versus the previous year due to negative impacts from currency (5%), portfolio changes (2%), volume (2%) and local price and product mix (2%). Segment pre tax operating earnings of US$1,586 million included about US$210 million, or US$0.17 per share, of negative impact from currency. Operating earnings included US$0.09 per share of benefit related to exchange gains and taxes, attributable to prior periods. Performance Chemicals segment operating earnings were US$113 million, or US$0.10 per share, a 55% reduction compared to the previous year.
DuPont's Board of Directors approved a third quarter dividend of US$0.38 per share, the 444th consecutive quarterly dividend since the company's first dividend in the fourth quarter of 1904. The third quarter dividend of US$0.38 per share of common stock is payable on 11 September 2015, to stockholders of record at the close of business on 14 August 2015. Regular quarterly dividends of US$1.125 per share on the US$4.50 series preferred stock and US$0.875 cents per share on the US$3.50 series preferred stock also were declared, both payable on 23 October 2015, to stockholders of record as of 9 October 2015.
The separation of Chemours was completed on 1 July 2015. In the first quarter of 2015, DuPont announced its intention to buy back shares using the approximately US$4 billion of distribution proceeds received from Chemours. In connection with the completion of the spin, DuPont's board has authorised the company to purchase and retire US$2 billion of common stock by 31 December 2015 with the remainder to be purchased and retired by 31 December 2016. The company expects to use an accelerated share repurchase plan in connection with the US$2 billion buyback by year end.
"We continued to improve margins across most of our ongoing businesses through our constant focus on productivity, even as we address industry wide challenges in agriculture and ongoing currency headwinds," said Ellen Kullman, DuPont Chair and CEO. "With the separation of our Performance Chemicals segment now complete, the next generation DuPont is leveraging our innovation platform to drive greater growth and value, with a continued emphasis on cost productivity, actively managing our portfolio, and the disciplined return of capital."
In the Performance Chemicals segment, operating earnings of US$113 million decreased by US$138 million, or 55%, driven primarily by lower prices for titanium dioxide, and US$43 million from the negative impact of currency. Excluding the impact of currency, operating earnings would have declined by about 38%.
In the Performance Materials segment, operating earnings of US$311 million increased by US$8 million, or 3%, driven by broad based improved product mix, productivity and volume growth for ethylene as prior year ethylene sales were constrained due to the scheduled outage at the Orange, Texas, ethylene unit. This was offset by US$42 million of negative impact of currency, the portfolio change from the sale of Glass Laminating Solutions/Vinyls, and a negative impact from an unplanned ethylene outage. Excluding the impact of currency, operating earnings would have increased by about 17%.
Safety & Protection
Operating earnings of US$195 million decreased US$14 million, or 7%, as productivity improvements and volume growth in medical packaging and protective garments were more than offset by US$20 million of negative currency impact, the portfolio impact of the Sontara® divestiture, and lower demand, particularly from the oil and gas industry, for Nomex® thermal resistant fibre and Sustainable Solutions offerings. Excluding the impact of currency, operating earnings would have increased by about 3%.
Consistent with continuing weakness in global agricultural markets, the company is reducing expectations for the year in its Agriculture segment due to weaker demand in global crop protection markets, reduced expectations for corn area in Latin America, and lower than expected soybean volumes in North America. The company continues to anticipate that the operational redesign will deliver savings of approximately US$0.40 per share in 2015. As a result, the company expects operating earnings per share for 2015 to be about US$3.10 per share for the full year, excluding US$0.80 per share of anticipated full year earnings from the Performance Chemicals segment. This represents a US$0.10 per share reduction from the prior outlook of US$4.00 per share, which included the Performance Chemicals segment.
Adapted from press release by Rosalie Starling
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