Issue Date: November 6, 2017
DowDuPont leads a strong third quarter
DowDuPont’s first earnings report as a combined company revealed higher, broad-based demand for chemicals that powered a hike in earnings for the third quarter compared to pro forma results for 2016. Other U.S. chemical firms also took advantage of the economy’s growth, bouncing back after a September disrupted by Hurricane Harvey on the Gulf Coast.
Sales and prices at DowDuPont increased in several businesses, and both industrial demand and consumer markets got credit for the good-news quarter. Adjusted earnings were up 14% to $1.3 billion.
The company saw double-digit sales gains for polyurethanes, chlor-alkali, and vinyl. Sales in the industrial intermediates and infrastructure business jumped 16%, while coatings ingredient sales grew 8%. Meanwhile, plastic packaging and other consumer-oriented businesses continued their strong gains.
DowDuPont, which will ultimately split into separate agriculture, materials science, and specialty products companies, updated investors on post-merger plans. Notably, it announced actions to achieve a previously promised $3 billion in cost cuts. Without providing details, the company said the actions will include procurement synergies, facilities consolidations, plant shutdowns, and global workforce reductions.
At Huntsman Corp., which had its own merger with Clariant canceled due to pushback from Clariant shareholders, volumes and prices increased for polyurethane intermediates and materials used in electronics. The spin-off of Venator, Huntsman’s pigment and additives business, reduced Huntsman’s debt by nearly half and gave an assist to earnings, which soared 180% to $179 million.
The Gulf storms briefly dented demand for industrial catalysts at W. R. Grace, but the company said overall orders from refineries and plastics manufacturers pushed catalyst sales up 6% for the quarter. In total, the firm reported a $4 million hurricane impact on earnings.
Harvey also interrupted Gulf operations at Eastman Chemical. But strong demand for the company’s additives, functional products, and intermediates helped the firm raise earnings 16% to $323 million.
Eastman CEO Mark Costa said the results are a “testament to our scale, vertical integration, and the tremendous capability and determination of the Eastman team.”
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