=DuPont (DD) reported 4Q earnings on Tue 26 Jan 2016 (before open)

** charts before earnings **



** charts after earnings **

DuPont beats by $0.01, reports revs in-line; guides FY16 EPS below consensus :

• Reports Q4 (Dec) earnings of $0.27 per share, excluding non-recurring items,$0.01 better than the Capital IQ Consensus of $0.26; revenues fell 9.4% year/year to $5.3 bln vs the $5.31 bln Capital IQ Consensus. Excluding currency, sales declined 1 %. Currency negatively impacted sales by an additional 8 %. Segment pre-tax operating earnings of $553 million included $170 million, or $0.17 per share, of negative impact from currency.
  • Growth in Industrial Biosciences and Nutrition & Health was more than offset by declines in Agriculture, Performance Materials, Safety & Protection and Electronics & Communications.
• Co issues downside guidance for FY16, sees EPS of $2.95-3.10, excluding non-recurring items, vs. $3.13 Capital IQ Consensus, including an expected benefit of $0.64 per share from the 2016 global cost savings and restructuring plan.
  • Current difficult global economic conditions in agriculture and slower growth in emerging markets are expected to continue, challenging the co's sales growth in 2016. The increase in the expected benefit results from identification of additional savings that will be delivered from the existing plans, including previously announced employee reduction estimates. The benefit from the 2016 global cost savings and restructuring plan will be weighted toward 2H16 as specific actions continue to be implemented in the first and second quarters.
  • 2016 operating earnings also includes ~$0.30 per share of estimated negative currency impact due to the continued strengthening of the U.S. dollar, pressuring both the top and bottom line. A higher base tax rate, reflecting the expected geographic mix of earnings, is expected to negatively impact operating earnings by $0.05 - $0.10 per share. The currency impact is expected to be most significant in the first half of the year due to a further weakening of the U.S dollar. Given the seasonality of the co's operating earnings from Agriculture in the northern hemisphere, the company anticipates ~two-thirds of the expected currency impact to occur in 1H16.
• Merger with Dow (DOW) expected to close in 2H16.