DowDuPont sales miss on currency effects, materials science
(AP Photo/Richard Drew, File)
U.S chemicals company DowDuPont's revenue fell short of analyst estimates in the fourth quarter, hurt by currency effects and reduced sales of chemicals used in packaging and brake fluids.
The company, formed by the $130 billion merger of chemical giants Dow Chemical and DuPont in September 2017, said net sales for the quarter were $20.1 billion, unchanged from a year ago, but missing analysts' estimates of $20.92 billion.
"We expect global economic expansion to continue in 2019 at a moderately slower pace than 2018," Chief Financial Officer Howard Ungerleider said, adding that the company was closely monitoring ongoing trade negotiations and the pace of economic activity in China.
During the quarter, DowDuPont clocked double-digit percentage volume growth in China, he told Reuters in an interview on the results.
DowDuPont, which is in the process of splitting itself up into three companies, reiterated that the separation was on track. The new Dow will spin out of DowDuPont by April 2019 and its agriculture division, Corteva Agriscience, will spin out in early June.
In the quarter, the company said local prices in the regions they operate in rose by about 1 percent, but said currency changes reduced sales by 2 percent.
Sales from its biggest revenue generator - the materials science business - fell 1 percent to $11.8 billion. Volumes - a proxy for demand - rose 1 percent. The company said margin compression in materials science, lower equity earnings and the currency impact had all weighed on earnings before interest, tax, depreciation and amortization.
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Net income from continuing operations for the fourth quarter was $513 million. DowDuPont saw a $1.1 billion benefit from lower U.S corporate taxes in the year ago quarter, but posted a net loss of $1.2 billion from continuing operations, largely on merger-related costs.
Adjusted earnings for the quarter came in at 88 cents per share, an increase of 6 percent.
(Reporting by Shradha Singh in Bengaluru)