The company announced second-quarter 2016 GAAP earnings of $1.16 per share and operating earnings of $1.24 per share. Prior year GAAP and operating earnings were $1.06 and $1.09 per share, respectively.
Second-quarter 2016 sales totaled $7.1 billion, down slightly versus prior year as volume growth of 2% was more than offset by pressure from local price, currency and portfolio.
CEO Edward Breen said the sales figures, which might seem anemic under other circumstances, reflect a significant departure from recent trends.
“I sure hate to brag about a sales number that's around zero, but – and I'm not. We always want to strive to do better. But just to give a little backdrop, the reason it feels better is we were plus 1% organically. For the whole company, we were plus 2% on a volume basis. And the quarters before that, four or five quarters before that, organically, we were kind of running a negative 2%. So, we've seen a shift of about 3%, which is not insignificant,” he said in an earnings call with analysts that was posted in transcript form on the site seekingalpha.com.
Merger to result in new triad
The positive earnings come in the wake of the overwhelming approval by shareholders of the merger with Dow Chemical Co. The plan, which was announced last December and is slated to close by the end of the year and which still must pass anti-trust review, would split the merged company, which would have combined market cap of about $122 billion (second only among chemical companies to BASF), into three separate segments focused on plastics and industrial chemicals, agricultural products and specialty products that would include food ingredients. The deal is seen as part of a merger tide sweeping the ag and chemical sectors that is a result of sliding commodity prices.
Products directed at human nutrition, which will be one of the flagship segments under the merger, performed well for DuPont in the second quarter, according to CFO Nicholas Fanandakis.
“Nutrition & Health results increased $30 million, which more than offset negative currency. Volume growth of 3% in the segment was led by demand in probiotics and specialty proteins. Operating margins in this segment improved about 350 basis points and have now grown year-over-year for 12 consecutive quarters,” he said.
DuPont has become a major dietary ingredients supplier via a series of mergers. The company paid $6.5 billion for probiotics supplier Danisco in 2011, and took full control of soy ingredients supplier Solae from joint venture partner Bunge in 2012.