DowDuPont Reports Fourth Quarter and Full Year 2018 Results
Fourth Quarter Financial Highlights
GAAP earnings per share from continuing operations totaled $0.21. Adjusted earnings1 per share increased 6 percent to $0.88, compared with the year-ago period of $0.83. Adjusted earnings per share excludes significant items in the quarter totaling net charges of $0.56 per share and an $0.11 per share charge for DuPont amortization of intangible assets.
- Net sales were even with the year-ago period at $20.1 billion, as price and volume gains were offset by currency.
- Volume grew 1 percent from the year-ago period. Gains were achieved in Asia Pacific, up 8 percent and Latin America, up 9 percent, which more than offset volume declines in U.S. & Canada, down 3 percent and EMEA, down 1 percent.
- Local price rose 1 percent, with gains in most regions. Currency decreased sales 2 percent.
- GAAP Net Income from Continuing Operations totaled $513 million. Operating EBITDA1 was $3.9 billion, flat with the year-ago period, as cost synergies and local price gains were offset by margin compression in the Materials Science Division, lower equity earnings and a headwind from currency.
- DowDuPont achieved cost synergy savings of more than $500 million in the quarter, and since merger close has now delivered more than $1.8 billion of cumulative savings.
- Cash flow from operations in the quarter was $5.1 billion compared to $1.8 billion in the year-ago period. After adjusting for the accounting and presentation change for accounts receivable securitization, cash flow from operations rose $0.9 billion year-over-year.
- The Company returned $2.3 billion to shareholders in the quarter through dividends ($0.9 billion) and share repurchases ($1.4 billion). DowDuPont intends to complete its remaining open share repurchases in the first quarter of 2019. Since merger close, the Company has returned nearly $10 billion to shareholders.
“In our first full year as a merged company, we delivered consistently strong results. Pro forma sales rose 8 percent with gains in every geography. We delivered a 13 percent increase in operating EBITDA. And we raised our cost synergy expectation by 20 percent to $3.6 billion, while continuing to return significant capital to shareholders,” said Ed Breen, chief executive officer of DowDuPont.
“We remain on track for the separation of the new Dow on April 1, followed by Corteva from the new DuPont on June 1. We are excited about launching these three global companies, each set to be an industry leader with the right capital structure and now better positioned to serve customers, compete in their end markets and focus on their innovation priorities. We’ve also put in place strong leadership teams who are singularly focused on capitalizing on their competitive advantages and delivering on their substantial growth and cost synergy opportunities to create value both now and over the long-term.”
2018 Full-Year Highlights
- GAAP earnings per share from continuing operations totaled $1.65. Adjusted earnings per share was $4.11, up 21 percent versus pro forma results in the year-ago period. Adjusted earnings per share excludes significant items totaling net charges of $2.02 per share, as well as a $0.44 per share charge for DuPont amortization of intangible assets.
- GAAP net sales increased 38 percent. Net sales increased 8 percent to $86.0 billion versus pro forma results in the year-ago period, with gains in all regions.
- Volume grew 4 percent on a pro forma basis, with gains in most regions, led by double-digit growth in Asia Pacific.
- Local price rose 3 percent on a pro forma basis, with gains in all regions. Currency increased sales 1 percent.
- GAAP Net Income from Continuing Operations totaled $4.0 billion. Operating EBITDA increased 13 percent to $18.3 billion versus pro forma results in the year-ago period, as cost synergies; local price gains; volume growth, including the benefit of new capacity additions; lower pension/OPEB costs; and higher equity earnings more than offset higher raw material costs.
- DowDuPont achieved year-over-year cost synergy savings of $1.6 billion, surpassing its increased target of $1.5 billion.
- Cash flow from operations totaled $4.7 billion and included discretionary pension contributions of approximately $2.2 billion. Excluding these discretionary contributions, cash flow from operations would have been $6.9 billion.
“We expect global economic expansion to continue in 2019 at a moderately slower pace than 2018,” said Howard Ungerleider, chief financial officer of DowDuPont. “We continue to closely monitor macroeconomic and geopolitical developments, including ongoing trade negotiations and the pace of economic activity in China. In this environment, we remain focused on the actions in our control, including capitalizing on our growth investments, capturing cost synergy savings, delivering productivity actions and advancing our spin milestones.”
The Company will host a live webcast of its second quarter earnings conference call with investors to discuss its results, business outlook and other matters today at 8:00 a.m. ET. The slide presentation that accompanies the conference call will be posted on the DowDuPont Investor Relations events and presentations page. A replay of the webcast will also be available on the investor events and presentations page of www.dow-dupont.com.