DowDuPont Inc. (NYSE: DWDP) reported third-quarter 2017 results Thursday morning before markets opened. The conglomerate posted quarterly pro forma adjusted operating earnings per share (EPS) of $0.55 on pro forma revenues of $18.3 billion. In the third quarter of 2016, the company reported pro forma EPS of $0.50 on revenues of $16.99 billion. Consensus estimates called for $0.42 in EPS and $18.01 billion in revenues.

The former Dow Chemical and E.I. du Pont de Nemours completed their merger on August 31. Pro forma results reflect the results of operations of Dow and DuPont assuming the merger had occurred on January 1, 2017. The newly formed company remains a component of the Dow Jones Industrial Average, replacing DuPont.

Also on a pro forma basis, net income fell 53%, from $494 million to $232 million. Adjusted EBITDA rose by 7%, from $3.02 billion to $3.22 billion, driven by volume and price gains, higher equity earnings, and lower pension costs due to purchase accounting. The gains more than offset higher feedstock costs, weak conditions in agriculture markets, the unfavorable impact of hurricanes, and startup costs related to new assets on the U.S. Gulf Coast.

CEO Ed Breen said:

Our operating earnings increase was the result of broad-based demand growth in most of our core end-markets and disciplined margin management, which more than offset several headwinds, from multiple hurricanes to higher feedstock costs and a delayed start to the summer agriculture season in Brazil. … 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.

DowDuPont expects to generate those cost savings through procurement savings, layoffs, buildings and facilities consolidation, and shutting down selected assets. In the third quarter, the company recognized pretax charges of $180 million and it expects to recognize total pretax charges of approximately $2 billion, with approximately $1 billion expected in the fourth quarter of 2017. The program is expected to achieve a 70% run rate at the end of 12 months and 100% run rate within 24 months.

The consensus analysts’ estimate calls for fourth-quarter EPS of $0.69 and revenues of $18.92 billion. For the full year, analysts are looking for EPS of $3.30 and $79.18 billion in revenues.

Shares traded up about 0.3% Thursday morning to $73.55, after closing at $73.32 on Wednesday, up 1.4% for the day. The 52-week trading range is $51.60 to $73.85. The 12-month consensus price target on the stock was $78.70 before this morning’s earnings release.

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