DowDuPont„¢ (NYSE:DWDP) today provided an update to its previously stated modeling guidance for the first quarter of 2019, as a result of near-term trends and discrete headwinds in some of its key value chains in the Agriculture and Materials Science divisions.
DowDuPont now expects first quarter 2019 net sales to be down high-single digits percent (versus previous guidance of down mid-single digits percent) and expects operating EBITDA to be down high-teens percent (versus previous guidance of down low-teens percent), both versus the same quarter last year. Key drivers of the Companys updated modeling guidance for the first quarter include:
- Agriculture: Flooding during the month of March in the Midwestern region of the U.S. has culminated in a federal disaster declaration for the region. Transportation disruptions throughout the region and significant road closures have halted farming operations, limited the ability to deliver products to customers, and delayed pre-season applications. As a result, Division net sales for the first quarter of 2019 are expected to be down 4 – 6 percent and operating EBITDA is expected to be down $125 – $150 million, as compared to the same quarter last year. An assessment of the full year impacts, accounting for delays in first quarter customer deliveries along with expected recoveries, will be provided with the upcoming first quarter earnings release.
- Materials Science: Net sales are expected to be down low-teens percent (versus previous guidance of down high-single digits percent) and operating EBITDA is expected to be down mid-20s percent (versus previous guidance of down low-20s percent). The midpoint of the Divisions updated guidance results in approximately $100 million lower operating EBITDA versus previous guidance, driven primarily by greater-than-expected margin compression globally in Packaging & Specialty Plastics.
- Specialty Products: Net sales and operating EBITDA are expected to be in line with previous guidance.
DowDuPont will release its financial results for the first quarter of 2019 on May 2. Analysts are encouraged to join the Companys earnings conference call at 8 a.m. ET. DowDuPont will release its first quarter earnings results via press release prior to the call. Dow will also hold a conference call for the first quarter of 2019, at 9 a.m. ET, to discuss the Materials Science Divisions financial results within DowDuPont.
DowDuPont (NYSE: DWDP) is a holding company comprised of The Dow Chemical Company and DuPont with the intent to form strong, independent, publicly traded companies in agriculture, materials science and specialty products sectors that will lead their respective industries through productive, science-based innovation to meet the needs of customers and help solve global challenges. For more information, please visit us at www.dow-dupont.com.
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DowDuPont plans to separate into three, independent, publicly traded companiesone for each of its agriculture, materials science and specialty products businesses (the Intended Business Separations and the transactions to accomplish the Intended Business Separations, the separations).
In furtherance of the Intended Business Separations, DowDuPont is engaged in a series of reorganization and realignment steps to realign its businesses so that the assets and liabilities aligned with the materials science business will be held by legal entities that will ultimately be subsidiaries of Dow Inc. (Dow) and the assets and liabilities aligned with the agriculture business will be held by legal entities that will ultimately be subsidiaries of Corteva Inc. (Corteva). Following this realignment, DowDuPont expects to distribute its materials science and agriculture businesses through two separate U.S. federal tax-free spin-offs in which DowDuPont stockholders, at the time of such spin-offs, will receive pro rata dividends of the shares of the capital stock of Dow and of Corteva, as applicable (the distributions). 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These risks are and will be more fully discussed in DowDuPonts current, quarterly and annual reports and other filings made with the U. S. Securities and Exchange Commission (the Commission) as well as the registration statement on Form 10 of Dow and the preliminary registration statement on Form 10 of Corteva, in each case as may be amended from time to time in future filings with the Commission. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. 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