DOW Dow Inc

By Jacob Bunge 

DuPont Co. boosted its 2016 profit target as the agriculture and chemical giant reported first-quarter earnings that topped analysts' expectations.

"Solid execution, local price and product mix gains, and higher corn area led to a strong start to the year for our [agriculture] business," said Ed Breen, DuPont's chief executive. "Our other businesses generally performed well, slightly above our expectations."

DuPont's upbeat results in its agriculture and nutrition divisions come as contraction in the U.S. farm sector and currency pressures have pressured DuPont and its competitors.

The Wilmington, Del., company said it now expects to earn $3.05 to $3.20 a share in 2016, an increase of 10 cents from its prior outlook as DuPont slashes spending ahead of its planned merger with rival Dow Chemical Co., which the companies aim to complete this year pending regulators' approvals.

The anticipated boost to DuPont's earnings came after the U.S. dollar weakened against "most currencies" over the past three months, the company said. The U.S. dollar's strength over the past year diminished DuPont's profits abroad and made its products more expensive in overseas markets.

The strong start for DuPont's agriculture business likely will taper off in the second quarter, the company said, as insecticide and soybean volumes have weakened. Profits from performance materials declined in the first quarter because of slowing ethylene demand, while earnings from nutrition and health products increased because of growth in probiotic and ingredient sales volumes.

Mr. Breen said DuPont is on track with plans to eliminate $730 million in annual costs this year, with corporate expenses in the first quarter down 44% versus prior-year levels, and overall operating costs falling 7%. DuPont announced in December a cost-saving plan that included cutting 5,000 employees, most of whom have by now left the company or are in the process of exiting.

For the first quarter, DuPont reported earnings of $1.2 billion, or $1.39 a share, up from $1 billion, or $1.13 a share, a year ago. DuPont estimated that foreign-exchange shifts lowered its per-share earnings by 10 cents in the quarter.

Excluding certain items, the company's operating earnings fell 4% to $1.11 billion but were flat on a per-share basis at $1.26 because the company had fewer shares outstanding in the latest quarter. Analysts surveyed by Thomson Reuters had forecast operating income of $1.04 a share for the quarter ended March 31.

DuPont's sales in the quarter fell 6% to $7.4 billion, though remained ahead of the $7.19 billion projected by analysts.

DuPont released the results ahead of the planned release time scheduled for 6 a.m. ET Tuesday, after inadvertently sending a partial earnings release to some reporters while formatting it Monday evening.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

April 26, 2016 02:48 ET (06:48 GMT)

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