DowDuPont says spinoffs will occur in 14 to 16 months

By Allison PrangIndustriesDow Jones Newswires

DowDuPont (NYSE:DWDP) raised on Thursday its forecast for cost savings from its push to divide itself into three companies and updated its timeline to complete the process.

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The chemical giant, formed from the late August merger of DuPont and Dow Chemical, said it expects moves to cut jobs and change its facility footprint to save $3.3 billion in annual costs, up from its previous guidance of $3 billion.

Its plan to split into three different companies, which will be focused on specialty-chemical products, materials and agriculture, was supposed to take up to two years.

On Thursday, the company said the process will take between 14 to 16 months. In its fourth quarter, DowDuPont reported a pro forma loss of $1.21 billion, or 52 cents a share, compared with a pro forma loss of $81 million, or 4 cents a share, in the year-ago period.

DowDuPont recorded a $1.1 billion benefit from recent U.S. tax law changes, but it also had $3.11 billion of restructuring and goodwill impairment items in quarter.

The new tax law is expected to reduce its 2018 tax rate by 1 to 2 percentage points compared with prior expectations. On a pro forma adjusted basis, the company earned $1.96 billion, or 83 cents a share, up from $1.34 billion, or 59 cents a share.

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Analysts polled by Thomson Reuters were expecting earnings of 67 cents a share. Net sales rose 13% on a pro forma basis to $20.07 billion, helped by increases in most divisions and geographic sectors. Industrial intermediates and infrastructure pro forma net sales rose 27% to $3.55 billion.

Packaging and special products rose 17% on a pro forma basis to $6.09 billion. Electronics and imaging sales rose less than 1%. Shares, which have gained 6.1% over the past month, rose 0.6% in premarket trading on low volume.

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