DuPont Reports 4Q 2016, Full-Year Results

DuPont reported is fourth quarter and full-year 2016 results.
 
In 4Q 2016, sales of $5.2 billion decreased 2%. Volume declined 1% as growth in Performance Materials, Electronics & Communications and Industrial Biosciences was more than offset by declines in Agriculture, due to timing of fourth-quarter seed sales primarily due to the southern U.S. route-to-market change.
 
GAAP earnings per share (EPS) totaled $0.29 versus a loss of $(0.26) per share in prior year. Operating EPS nearly doubled to $0.51 from $0.27 in prior year.
 
For the full year, GAAP EPS increased 36% to $2.85 from $2.09 in prior year. Operating EPS increased 21% to $3.35 from $2.77 in prior year.
 
Sales of $24.6 billion decreased 2%. Local price and currency each lowered sales by 1%. Volume was flat as growth in Performance Materials, Nutrition & Health and Industrial Biosciences was offset by declines in the other segments.
 
Free cash flow improved $1.6 billion primarily due to higher earnings, lower capital expenditures, lower tax payments, and working capital improvements.
 
“2016 was an important year for DuPont as we exceeded our expectations for earnings, cost savings, operating margin expansion and free cash flow improvement,” said Ed Breen, chairman and CEO of DuPont. “We look forward to closing the merger with Dow and are continuing to have constructive discussions with regulators in key jurisdictions. We now expect the merger to close in the first half of 2017, pending regulatory approval.”
 
The following is a summary of business results for each of the company’s reportable segments comparing fourth quarter and full year with the prior year, unless otherwise noted.
 
• Electronics & Communications – Fourth-quarter 2016 operating earnings of $98 million increased $11 million, or 13%, on cost savings and volume growth in Solamet paste. Operating margins expanded by about 115 basis points.
 
Full-year operating earnings of $358 million were even with the prior year as cost savings were offset by lower sales and a $16 million litigation expense. Sales declined on weakness in consumer electronics markets and decreased demand in the photovoltaic market impacting sales of Tedlar film. Operating margins expanded by about 90 basis points.
 
• Performance Materials – Fourth-quarter 2016 operating earnings of $328 million increased $47 million, or 17%, as lower product costs, cost savings, and increased demand in global automotive markets, more than offset the absence of $33 million in prior year benefits from the sale of a business and tax benefits associated with a manufacturing site. Operating margins expanded by 275 basis points.
 
Full-year operating earnings of $1,297 million increased $81 million, or 7% as cost savings, increased volumes, and lower product costs, more than offset a $63 million negative impact from currency and the absence of $49 million of benefits from the prior year, comprised of a net benefit from a joint venture, the sale of a business and the realization of tax benefits associated with a manufacturing site. Operating margins expanded by about 180 basis points.