DuPont Wins on Earnings Despite Merger Setback

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When E.I. du Pont de Nemours and Co. (NYSE: DD) reported its fourth-quarter financial results before the markets opened on Tuesday, it posted $0.51 in earnings per share (EPS) and $5.2 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.42 in EPS and revenue of $5.29 billion. In the same period of last year DuPont reported EPS of $0.27 and $5.3 billion in revenue.

Looking ahead to the first quarter, the company expects EPS to increase about 8% year over year, driven by benefits from cost savings and the impact of the change in timing for seed deliveries, primarily related to the southern U.S. route-to-market change in agriculture. The consensus estimates are calling for $1.46 in EPS and $7.75 billion in revenue for the current quarter.

In terms of the merger with Dow Chemical Co. (NYSE: DOW), DuPont expects the transaction to close in the first half of 2017, pending regulatory approval. This is a slight setback in the timeline due to talks with antitrust regulators in the European Union. The deal, announced in December 2015, was previously expected to close in the first quarter of 2017.

Ed Breen, board chair and chief executive of DuPont, commented:

2016 was an important year for DuPont as we exceeded our expectations for earnings, cost savings, operating margin expansion and free cash flow improvement. We made excellent progress on our strategic priorities in 2016 to increase shareholder value, and we will build on this groundwork as we move into 2017. We look forward to closing the merger with Dow and are continuing to have constructive discussions with regulators in key jurisdictions. We now expect the merger to close in the first half of 2017, pending regulatory approval.

On the books, DuPont cash, cash equivalents and marketable securities totaled $5.97 billion at the end of the quarter, down from $6.21 billion in the same period of last year.

Shares of DuPont were trading up 1.7% at $74.00 on Tuesday. The stock has a consensus analyst price target of $78.36 and a 52-week trading range of $50.71 to $75.86.

Dow shares were last seen up 1% at $57.81, with a consensus price target of $62.94 and a 52-week range of $40.69 to $59.33.

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