MIDLAND, Mich. & WILMINGTON, Del.--(BUSINESS WIRE)--DowDuPont (NYSE: DWDP):

Third Quarter Financial Highlights

• GAAP earnings per share from continuing operations was $0.21. Adjusted earnings1 per share increased 35 percent to $0.74, compared with pro forma adjusted earnings1 per share in the year-ago period of $0.55. Adjusted earnings per share excludes significant items in the quarter totaling net charges of $0.42 per share and an $0.11 per share charge for DuPont amortization of intangible assets.
• Net sales increased 10 percent to $20.1 billion with gains in all divisions and all regions, from pro forma net sales of $18.3 billion in the year-ago period. Net sales grew double-digits in Asia Pacific and high single digits in all other regions.
• Volume grew 5 percent on a pro forma basis from the year-ago period, with gains in all divisions and all regions, led by double-digit growth in Asia Pacific and Latin America.
• Local price rose 5 percent on a pro forma basis, with gains in all divisions and all regions.
• Operating EBITDA1 increased 19 percent on a pro forma basis from the year-ago period to $3.8 billion. Operating EBITDA drivers in the quarter included local price and volume gains, cost synergies and lower pension/OPEB costs2, which more than offset the impact of higher raw material costs and a headwind from currency.
• DowDuPont achieved cost synergy savings of more than $450 million in the quarter, and since merger close has now delivered more than $1.3 billion of cumulative savings. The Company also delivered a cost synergy run-rate of greater than $2.5 billion in the quarter, exceeding its Year 1 cost synergy run-rate target of 75 percent of the $3.3 billion.
• DowDuPont is announcing today a new share repurchase program of $3 billion, which it expects to complete by the first intended spin. In addition, the Company is increasing its cost synergy commitment to $3.6 billion from $3.3 billion and increasing the expected 2018 year-over-year savings to $1.5 billion from $1.4 billion.
• Cash flow from operations was a use of cash of $0.3 billion and included discretionary pension contributions of approximately $2.2 billion. Excluding these discretionary contributions, cash flow from operations would have been $1.9 billion.
• The Company returned nearly $2 billion to shareholders in the quarter through dividends ($0.9 billion) and share repurchases ($1 billion). Since merger close, DowDuPont has returned $7.5 billion to shareholders.

CEO Quote

“Our teams generated strong gains in volume, price and operating EBITDA by continuing to execute our growth strategy, capture cost synergies and drive productivity improvements,” said Ed Breen, chief executive officer of DowDuPont. “Organic sales rose 10 percent, equally driven by volume and local price as customer demand remained strong. We delivered our year-over-year cost synergies and we are again raising our target, now to $3.6 billion. We are also reaffirming our full year 2018 EPS guidance provided in August with our second quarter earnings announcement. Each division is performing well, and we remain on track to complete the intended separations, beginning with Materials Science on April 1, followed by Agriculture and Specialty Products on June 1.”

Third Quarter Division Highlights

Materials Science

• Net sales increased 13 percent to $12.4 billion versus pro forma net sales in the year-ago period, with double-digit gains in all segments and increases in all regions.
• Volume grew 6 percent, with gains in most segments and all regions. Local price rose 7 percent, with gains in all segments and all regions.
• Operating EBITDA rose 8 percent to $2.5 billion versus pro forma operating EBITDA in the same quarter last year, with gains in most segments.

Performance Materials & Coatings

Performance Materials & Coatings reported net sales of $2.5 billion, up 11 percent versus pro forma net sales of $2.2 billion in the year-ago period. The sales increase included double-digit gains in most regions. Local price increased 13 percent, with double-digit gains in all regions. Volume declined 1 percent versus the year-ago period, driven primarily by price/volume management in the Consumer Solutions business. Currency was a 1 percent headwind.

Consumer Solutions delivered double-digit sales growth due to local price gains in all regions and disciplined price/volume management in upstream silicone intermediate products and mix enrichment toward downstream products. Coatings & Performance Monomers also reported double-digit sales growth, driven by local price increases in all regions in response to higher raw material costs.

Operating EBITDA increased to $628 million, up 37 percent from pro forma operating EBITDA of $460 million in the year-ago period, primarily due to increased local pricing and cost and growth synergies that more than offset higher raw material costs.

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure reported net sales of $3.8 billion, up 18 percent from pro forma net sales of $3.2 billion in the year-ago period, with growth in all regions and double-digit increases in Asia Pacific, United States & Canada, and Latin America. Volume grew 14 percent, with gains in all regions. Local price rose 5 percent, with gains in most regions, led by a double-digit increase in United States & Canada. Currency was a 1 percent headwind.

Polyurethanes & CAV delivered sales gains in all regions, driven by volume and local price gains in most regions, more than offsetting easing isocyanate prices. The volume increase was led by Asia Pacific and EMEA. Industrial Solutions reported double-digit sales growth, driven by volume and local price gains in all regions. Volume growth was led by gains in industrial specialties, with double-digit growth in intermediates for crop defense; energy heat management; and food and feed manufacturing. Volume gains in both Polyurethanes & CAV and Industrial Solutions were further supported by increased supply from the Sadara joint venture.

Operating EBITDA in the third quarter was $654 million, down 3 percent from pro forma operating EBITDA of $676 million in the year-ago period. Rising raw material costs, the easing of isocyanate margins, and an unplanned outage associated with an isocyanates facility on the U.S. Gulf Coast more than offset local price and volume gains, as well as cost synergies.

Equity earnings for the segment totaled $54 million, compared with pro forma equity earnings of $41 million in the year-ago period. The year-over-year growth was driven by higher monoethylene glycol (MEG) pricing that benefited the Kuwait joint ventures.

Packaging & Specialty Plastics

The Packaging & Specialty Plastics segment achieved net sales of $6.1 billion, up 11 percent from pro forma net sales of $5.5 billion in the year-ago period. Sales rose in all regions, with double-digit increases in EMEA, Asia Pacific, and United States & Canada. Local price rose 6 percent, with gains in all regions, led by a double-digit increase in EMEA. Volume grew 5 percent, with increases in all regions.

The Packaging and Specialty Plastics business grew volume, supported by higher demand in most regions and new capacity additions on the U.S. Gulf Coast. The business achieved volume gains across its key end-markets, led by industrial and consumer packaging and health and hygiene. The business also delivered double-digit growth in elastomers applications.

Operating EBITDA for the segment totaled $1.2 billion, up 4 percent from pro forma operating EBITDA of $1.1 billion in the year-ago period. Local price and volume gains, including increased supply from growth projects, lower commissioning and startup costs, increased equity earnings and cost synergies more than offset higher feedstock costs, notably on the U.S. Gulf Coast.

Equity earnings for the segment were $83 million, up from pro forma equity earnings of $66 million in the year-ago period. Growth was driven by higher equity earnings from the Kuwait joint ventures and improved Sadara results, which more than offset lower earnings from the Thai joint ventures.

Specialty Products

• Net sales increased 8 percent to $5.7 billion versus pro forma net sales in the year-ago period, with gains in all regions and most segments.
• Volume grew 3 percent, local price rose 2 percent, and portfolio benefitted sales by 3 percent.
• Operating EBITDA grew 17 percent to $1.6 billion versus pro forma operating EBITDA in the same quarter last year, with gains in all segments.

Electronics & Imaging

Electronics & Imaging delivered net sales of $1.2 billion, flat with the year-ago period as volume growth of 1 percent was offset by a 1 percent decline in local price.

Volume growth in the segment was led by continued strength in semiconductor technologies and double-digit gains in display technologies. Increased semiconductor content in end-use applications drove strong demand in both chemical mechanical planarization (CMP) and advanced packaging market segments. Growth in displays was driven by strong demand in OLEDs. Partially offsetting this growth was a continued decline in photovoltaics on reduced demand for Tedlar® film and Solamet® paste resulting from revised incentive policies in China.

Operating EBITDA for the segment was $412 million, about flat with the year-ago period. Cost synergies, volume growth, and lower pension/OPEB costs were offset by higher raw material costs, higher costs due to growth investments and lower equity earnings.

Nutrition & Biosciences

The Nutrition & Biosciences segment reported net sales of $1.7 billion, up 14 percent from pro forma net sales of $1.5 billion in the year-ago period. The increase was due to an 11 percent net benefit from portfolio, 3 percent from volume and 1 percent from local price. Currency was a 1 percent headwind. The net positive impact from portfolio-related actions was due to the acquisition of FMC’s Health & Nutrition business.

Volume gains in the segment were led by Nutrition & Health on continued growth in probiotics and specialty proteins, primarily in Asia Pacific. In Industrial Biosciences, double-digit improvement in CleanTech, led by alkylation and acid equipment sales, and growth in bioactives in home and personal care was offset by declines in microbial control and biomaterials.

Operating EBITDA for the segment was $414 million, up 33 percent from pro forma operating EBITDA of $312 million in the year-ago period driven by a portfolio benefit, cost synergies, volume growth and lower pension/OPEB costs.

Transportation & Advanced Polymers

Transportation & Advanced Polymers reported net sales of $1.4 billion, up 8 percent from pro forma net sales of $1.3 billion in the year-ago period. Organic sales increased 9 percent with strength in both price and volume. Currency was a 1 percent headwind.

Volume gains of 3 percent reflected increases across all key end-markets, including strong demand in automotive, electronics and aerospace. Volume was up in all regions, led by growth in United States & Canada and Asia Pacific.

Local price increased 6 percent, mainly within engineering polymers, reflecting tight polymer supply and higher feedstock costs.

Operating EBITDA for the segment totaled $430 million, an increase of 32 percent from pro forma operating EBITDA of $325 million in the year-ago period. Higher local selling price, volume gains, lower pension/OPEB costs, and cost synergies contributed to the improvement, partly offset by higher raw material costs.

Safety & Construction

The Safety & Construction segment reported net sales of $1.4 billion, up 7 percent from pro forma net sales of $1.3 billion in the year-ago period. Organic sales increased 8 percent driven by strong volume growth and improved pricing, offset by a 1 percent currency headwind.

Volume gains of 6 percent were driven by broad-based growth across industrial, life and personal protection, and medical packaging end-markets, resulting in strong volume growth in aramids, Tyvek® protective materials and water solutions, partially offset by softness in construction in the U.S. residential market. Regional volume growth was led by increases in U.S. & Canada and Asia Pacific.

Local price increased 2 percent led by Kevlar® high-strength materials and Corian® Design.

Operating EBITDA for the segment totaled $389 million, an increase of 10 percent from pro forma operating EBITDA of $353 million in the year-ago period. Cost synergies and productivity, lower pension/OPEB costs and volume gains more than offset the impact of higher raw material and freight costs and the absence of prior year one-time gains.

Agriculture

• Net sales of $1.95 billion increased 2 percent from pro forma net sales of $1.91 billion in the year-ago period, driven by both volume gains and higher local price in Latin America.
• Organic sales rose 11 percent, as volume rose 8 percent while local price grew 3 percent. Currency decreased sales 6 percent while portfolio subtracted 3 percent.
• Operating EBITDA improved by $135 million, to a seasonal loss of $104 million versus a pro forma operating EBITDA loss of $239 million in the prior-year period.

Volume growth primarily reflected new product launches including Picoxy-based disease management crop protection products, and seed applied technologies in Latin America; growth from PyraxaltTM, a new insecticide in Asia Pacific; and gains from corn seeds, partially driven by an early start to the selling season in Latin America. Price increases were driven by crop protection in Latin America amid currency pressures. The portfolio impact reflected inclusion of one month of the Brazil corn remedy in last year’s quarter.

Within the segment, Crop Protection organic sales grew 17 percent and Seed organic sales increased 1 percent. Crop Protection growth reflected volume and price gains in Latin America and Asia Pacific, partly offset by volume declines in United States & Canada. Seed sales increased on volume growth, partially driven by an early start to the selling season in Latin America.

Operating EBITDA improvement reflected cost synergies, sales gains, lower performance-based compensation and lower pension/OPEB costs, partly offset by higher raw material costs and increased spending to continue advancing the new product pipeline.

Outlook

“Global demand for our products remains strong, supported by solid fundamentals, including business investment, manufacturing output, job growth and wage increases,” said Howard Ungerleider, chief financial officer of DowDuPont. “Going forward, we remain well positioned to continue to drive top-line gains from above-GDP demand growth for our products and new product launches, while further delivering productivity and cost synergy savings.”

About DowDuPont™

DowDuPont (NYSE: DWDP) is a holding company comprised of The Dow Chemical Company and DuPont with the intent to form strong, independent, publicly traded companies in agriculture, materials science and specialty products sectors that will lead their respective industries through productive, science-based innovation to meet the needs of customers and help solve global challenges. For more information, please visit us at www.dow-dupont.com.