DowDuPont Inc. (DWDP) - Get Report posted weaker-than-expected first quarter earnings Thursday in its first full investor report following its spin-off from Dow Inc. (DOW) - Get Report earlier this year.
DowDuPont said adjusted non-GAAP earnings for the three months ending in March were pegged at 84 cents per share, down 25% from last year but just ahead of the Street consensus forecast. Group net sales, the company said, fell 9% from last year to $19.6 billion, just shy of analysts' estimates of $19.65 billion.
Looking into 2019, DowDuPont said it sees second quarter net sales falling in the mid-single digit range for its specialty products division, while organic revenues will slow in the low-single digit percentage range. Adjusted earnings for its specialty products division, the company said, will also decline in the low-single digit range from the same period last year. Adjusted earnings for its agriculture division, DowDuPont said, will likely decline between 3% and 5% over the first half of the year.
"In 30 days, we expect to complete our journey to create three leading companies in the materials science, agriculture and specialty products industries from the combination of two world-class organizations," said CEO Ed Breen. "I am confident that each of the companies we have created is a compelling investment opportunity in their respective space, with attractive financial characteristics and capital allocation policies, best-in-class cost structures and innovation priorities to accelerate growth."
"What we have accomplished would not have been possible without our highly talented and experienced leadership teams and their organizations," he added. "I want to thank each of my colleagues and wish them well as we move forward as new Dow, Corteva and new DuPont."
DowDuPont shares were down 2.1% on Thursday at $36.48.
DowDuPont was formed by a $130 billion merger with Dow Chemical in 2017, but is now in the throes of a complicated three-way separation that will create companies focusing on agriscience, chemicals and packaging.
Corteva Agriscience, the company said, will be spun off on June 1, while Dow was separated on April 1 and added to the Dow Jones Industrial Average shortly after.
Dow also posted a sharp decline in first quarter profits Thursday, with earnings for the three months ending in March fell 24.4% from the same period last year to $1.92 billion, in-line with the company's previous guidance. Group sales, however, rose 10% to $10.8 billion and topped the Street consensus forecast of $10.68 billion.
Dow said second quarter headwinds, including maintenance costs, would be around $200 million higher than last year, but noted that rising oil prices would be "constructive" for group earnings as the year progresses. Dow also said it has around $400 million in cost savings to realize following its April spin-off from DowDupont.