DuPont Reports Second Quarter 2019 Results

DuPont announced financial results for the second quarter of 2019 and raised its full year guidance for pro forma adjusted EPS to a range of $3.75 to $3.85.  
 
“In the face of weaker than expected market conditions, our teams delivered on our bottom-line commitments by driving both cost and pricing actions resulting in operating EBITDA margin improvement of 170 basis points in the quarter,” said Marc Doyle, DuPont CEO.
 
“We also improved gross margin by more than 200 basis points with gains in each of our core segments,” Doyle continued. “We delivered these results by continuing to realize the benefits from our cost synergy initiatives, enacting new productivity programs in the face of challenged end markets, and driving higher pricing based on the value-added solutions we deliver.
 
“We saw strength in probiotics, water, safety, aerospace and healthcare end markets where we were able to capitalize on our strong customer relationships and innovative solutions. However, our portfolio is diverse, and our top-line results were impacted by the on-going softness in our short-cycle businesses,” added Doyle.
 
Net sales for the quarter totaled $5.5 billion, down 7% versus the same quarter last year. On an organic basis, net sales were down 3% with 2% higher pricing being more than offset by 5% lower volumes. Currency and portfolio headwinds decreased sales by 3% and 1%, respectively.
 
GAAP Income (loss) from continuing operations totaled $(1.1 billion), versus pro forma GAAP Income (loss) from continuing operations of $(11) million in the year-ago period. Operating EBITDA was $1.4 billion, flat with pro forma operating EBITDA in the prior year. Operating EBITDA margins improved 170 basis points to 26% driven by cost synergies and higher local price.
 
 “Our results show our readiness to respond to continuously evolving market conditions,” said Ed Breen, executive chairman of DuPont. “We drove productivity actions, significantly improved our margins and began executing immediately on a share repurchase program.”
 
Among the highlights, Electronics & Imaging reported net sales of $858 million, down 7% from the year-ago period. Organic sales were down 5% driven by lower volumes. Currency was a 2% headwind.
 
Volume gains in Display Technologies were more than offset by softer volumes in Semiconductor Technologies and Interconnect Solutions. Display Technologies volume gains were led by double-digit growth in OLEDs.
 
“Our team is delivering operating leverage through our financial results which allows us today to raise our full year pro forma adjusted EPS guidance despite expectations of a softer top line,” said Jeanmarie Desmond, CFO of DuPont. “We now expect full year organic sales to be slightly down versus prior year consistent with our expectation that soft demand in our short-cycle businesses extends into the second half. In addition to actions we took in the second quarter, we are taking new cost actions in the second half to mitigate our expected top line headwinds.”