REUTERS – Chemicals and seeds producer DuPont, which is merging with Dow Chemical Co, reported a better-than-expected profit for the seventh straight quarter, helped by a rise in seed sales.
Operating earnings at DuPont’s agriculture business rose 12 percent to $ 1.24 billion in the first quarter ended March 31.
Sales from the business, which accounts for half of its total revenue, rose 4 percent to $ 3.93 billion, helped by improved pricing as well as increased seed sale volumes.
DuPont has moved from selling its farm products to retailers and distributors, focusing instead on selling directly to farmers in the United States.
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This pushed the timing of some seed sales to the first quarter from the fourth.
Demand was also propelled by late-season seed demand in South America and the planting of the largest combined corn and soybean acres on record in the United States.
U.S. seeds and agrochemicals company Monsanto Co — which is in the process of being bought by Germany’s Bayer AG for $ 66 billion — also reported a better-than-expected quarterly profit earlier this month, helped by strong demand for its soybean and corn seeds.
DuPont said it expects its profit per share to dip by about 5 percent to $ 2.42 in the first half of the year, hurt by a 32 cent charge for the Dow deal.
“We continue to expect to close the merger in August of this year and quickly begin working on the 500-plus projects already identified to deliver the targeted $ 3 billion in cost synergies,” Chief Executive Ed Breen said in a statement.
The deal close has been repeatedly delayed. The merger, announced in December 2015, is now anticipated to close between Aug. 1 and Sept. 1.
DuPont said it expects operating earnings per share, which excludes one-time items, to rise 16 percent in the first half to $ 2.90, driven by sales growth.
Net income attributable to DuPont fell to $ 1.11 billion, or $ 1.27 per share, in the first quarter, from $ 1.23 billion, or $ 1.39 per share, a year earlier.
The latest quarter included charges of $ 36 million, while the year-ago quarter included a $ 160 million gain.
Excluding items, operating profit in the latest quarter was $ 1.64, above analysts’ estimate of $ 1.39, according to Thomson Reuters I/B/E/S.
Net sales rose 4.6 percent to $ 7.74 billion, beating estimates of $ 7.50 billion.
(Reporting by Swetha Gopinath in Bengaluru; Editing by Shounak Dasgupta)
