Newly-merged chemicals giant DowDuPont on Thursday reported a better-than-expected profit in its first quarterly earnings report and detailed its plan to save $3 billion in costs, including job cuts and plant consolidations.
For the third quarter, DowDuPont posted $232 million, or 55 cents of per share, in pro forma adjusted earnings, up 10% on a year ago. Pro forma net sales rose 8% to $18.3 billion.
Analysts had expected earnings of 42 cents per share on revenue of $17.7 billion.
“We delivered top- and bottom-line growth in the third quarter — a solid start for our newly-formed company,” CEO Ed Breen said in a news release, adding that “broad-based demand growth in most of our core end-markets and disciplined margin management … more than offset several headwinds, from multiple hurricanes to higher feedstock costs and a delayed start to the summer agriculture season in Brazil.”
“Moreover, we delivered these results while advancing several value-creating initiatives, including: closing the merger, completing our comprehensive portfolio review, and defining the new synergy targets for each division,” he said.
DowDuPont has three divisions — agriculture, materials science, and specialty products. In approximately 18 months, company officials intend to separate the combined company into three independent, publicly traded companies.
“Going forward, you should expect us to remain focused on executing on our $3 billion cost synergy commitment and advancing preparations to create three focused growth companies in agriculture, materials science, and specialty products,” Breen told investors.
DowDupont also said Thursday it is taking cost-saving actions “designed to integrate the organization post-merger and create strong foundations for the three intended companies.”
“The majority of this work will come from procurement synergies, global workforce reductions, buildings and facilities consolidations and select asset shutdowns, among other activities,” the company said, adding that it expects to recognize total pre-tax charges of about $2 billion related to the cost-reduction plan.
The first full quarter under the merger will be reflected in fourth-quarter results. In trading Thursday, DowDuPont stock rose 1.75% to $72.04.