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DowDuPont (DWDP) Q2 Earnings: Is Another Beat in Store?
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DowDuPont Inc. is gearing up to release second-quarter 2018 results before the opening bell on Aug 2.
DowDuPont logged adjusted earnings of $1.12 per share in the first quarter, which topped the Zacks Consensus Estimate of $1.08, translating into a positive surprise of 3.7%.
The company’s net sales went up 5% year over year to $21,510 million for the quarter, also exceeding the Zacks Consensus Estimate of $21,320 million. DowDuPont witnessed higher sales across most operating segments and geographic regions.
DowDuPont has outperformed the industry it belongs to over the past three months. The company’s shares have gained around 7.9% over this period, compared with roughly 5.4% growth recorded by the industry.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that DowDuPont is likely to beat on earnings estimates this quarter. This is because it has the right combination of two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Zacks ESP: Earnings ESP for DowDuPont is currently pegged at +0.90%. This is because the Most Accurate estimate stands at $1.34 while the Zacks Consensus Estimate is pegged at $1.33. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DowDuPont currently carries a Zacks Rank #3. The combination of a favorable Zacks Rank and a positive ESP makes us reasonably confident of an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Watch For
DowDuPont, during its first-quarter call, said that it expects net sales in the second quarter to increase more than 10% and operating EBITDA to rise more than 20% on a year-over-year basis. It sees net sales to be in the range of $23.3 billion to $24 billion for the second quarter. The Zacks Consensus Estimate for revenues for the second quarter stands at $23,671 million, reflecting an estimated 10% rise on a sequential comparison basis.
DowDuPont gained from higher pricing and solid demand across most of its end-markets in the first quarter, which will likely continue in the June quarter.
The company also remains committed to achieve its cost synergy target, execute its growth projects and deliver new products from its innovation pipeline. The company realized cost synergy savings of more than $300 million in the first quarter and is on track to deliver a 75% run-rate against its $3.3 billion cost synergy target by the end of the third-quarter 2018. It should gain from cost synergy realizations in the June quarter. The company expects to realize $325-$350 million of synergy savings in the second quarter.
For the Materials Science segment, DowDuPont expects sales to rise in the low-to-mid-teens percent range in the second quarter. It also expects operating EBITDA to be up in the mid-teens clip. The company expects the division to gain from contributions from end-market growth, an improvement in equity earnings led by the Sadara joint venture and new capacity additions in the U.S. Gulf Coast.
DowDuPont also envisions sales in its Specialty Products division to grow by high single-digits clip on the back of sustained end-market demand, application development and new product launches. The company also expects operating EBITDA to rise roughly 20% on volume and pricing gains and lower pension expenses.
Weather-related delays in the Northern Hemisphere and Brazil Safrinha seasons hurt revenues in DowDuPont’s Agriculture unit in the first quarter. The company expects revenues for its agriculture unit to be up by low-20s clip year over year in the second quarter. It also expects operating EBITDA to be up in the high-30s clip in the quarter. The results are expected to be supported by cost synergy realizations and new product launches.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
Orion Engineered Carbons, S.A. (OEC - Free Report) has an Earnings ESP of +3.85% and sports a Zacks Rank #2.
The Chemours Company (CC - Free Report) has an Earnings ESP of +2.38% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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DowDuPont (DWDP) Q2 Earnings: Is Another Beat in Store?
DowDuPont Inc. is gearing up to release second-quarter 2018 results before the opening bell on Aug 2.
DowDuPont logged adjusted earnings of $1.12 per share in the first quarter, which topped the Zacks Consensus Estimate of $1.08, translating into a positive surprise of 3.7%.
The company’s net sales went up 5% year over year to $21,510 million for the quarter, also exceeding the Zacks Consensus Estimate of $21,320 million. DowDuPont witnessed higher sales across most operating segments and geographic regions.
DowDuPont has outperformed the industry it belongs to over the past three months. The company’s shares have gained around 7.9% over this period, compared with roughly 5.4% growth recorded by the industry.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that DowDuPont is likely to beat on earnings estimates this quarter. This is because it has the right combination of two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Zacks ESP: Earnings ESP for DowDuPont is currently pegged at +0.90%. This is because the Most Accurate estimate stands at $1.34 while the Zacks Consensus Estimate is pegged at $1.33. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DowDuPont currently carries a Zacks Rank #3. The combination of a favorable Zacks Rank and a positive ESP makes us reasonably confident of an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Watch For
DowDuPont, during its first-quarter call, said that it expects net sales in the second quarter to increase more than 10% and operating EBITDA to rise more than 20% on a year-over-year basis. It sees net sales to be in the range of $23.3 billion to $24 billion for the second quarter. The Zacks Consensus Estimate for revenues for the second quarter stands at $23,671 million, reflecting an estimated 10% rise on a sequential comparison basis.
DowDuPont gained from higher pricing and solid demand across most of its end-markets in the first quarter, which will likely continue in the June quarter.
The company also remains committed to achieve its cost synergy target, execute its growth projects and deliver new products from its innovation pipeline. The company realized cost synergy savings of more than $300 million in the first quarter and is on track to deliver a 75% run-rate against its $3.3 billion cost synergy target by the end of the third-quarter 2018. It should gain from cost synergy realizations in the June quarter. The company expects to realize $325-$350 million of synergy savings in the second quarter.
For the Materials Science segment, DowDuPont expects sales to rise in the low-to-mid-teens percent range in the second quarter. It also expects operating EBITDA to be up in the mid-teens clip. The company expects the division to gain from contributions from end-market growth, an improvement in equity earnings led by the Sadara joint venture and new capacity additions in the U.S. Gulf Coast.
DowDuPont also envisions sales in its Specialty Products division to grow by high single-digits clip on the back of sustained end-market demand, application development and new product launches. The company also expects operating EBITDA to rise roughly 20% on volume and pricing gains and lower pension expenses.
Weather-related delays in the Northern Hemisphere and Brazil Safrinha seasons hurt revenues in DowDuPont’s Agriculture unit in the first quarter. The company expects revenues for its agriculture unit to be up by low-20s clip year over year in the second quarter. It also expects operating EBITDA to be up in the high-30s clip in the quarter. The results are expected to be supported by cost synergy realizations and new product launches.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
Domtar Corporation has an Earnings ESP of +1.70% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Orion Engineered Carbons, S.A. (OEC - Free Report) has an Earnings ESP of +3.85% and sports a Zacks Rank #2.
The Chemours Company (CC - Free Report) has an Earnings ESP of +2.38% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>