AgroPages-DowDuPont's Agriculture segment sales down 11% in Q1 2019-Agricultural news

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*Q19 GAAP EPS from Continuing Operations of $0.23; Adjusted EPS of $0.84

*1Q19 GAAP Net Income from Continuing Operations of $0.6B; Operating EBITDA of $4.0B

*Separation of Dow completed on April 1; remain on track for separation of Corteva Agriscience and DuPont on June 1

First Quarter Financial Highlights

GAAP earnings per share from continuing operations totaled $0.23 , a decline of 51 percent versus the year-ago period of $0.47 . Adjusted earnings per share decreased 25 percent to $0.84, compared with the year-ago period of $1.12. Adjusted earnings per share excludes significant items in the quarter totaling net charges of $0.50 per share and an $0.11 per share charge for DuPont amortization of intangible assets. Adjusted earnings per share in the year-ago period excludes significant items totaling net charges of $0.54 per share and an $0.11 per share charge for DuPont amortization of intangible assets.

Net sales of $19.6 billion were down 9 percent compared with the year-ago period on lower local price of 4 percent, a 3 percent currency headwind and volume declines of 2 percent.

Volume gains of 3 percent in Asia Pacific and 1 percent in EMEA were more than offset by volume declines in U.S. & Canada of 7 percent and in Latin America of 1 percent.

Local price increases in Specialty Products and Agriculture of 3 percent and 1 percent respectively, were more than offset by a price decline of 9 percent in Materials Science.

GAAP Net Income from Continuing Operations totaled $0.6 billion , down 50 percent versus the year-ago period. Operating EBITDA 1 was $4.0 billion , down 17 percent as compared to the year-ago period. Margin compression in the Materials Science Division, weather-related volume declines in the Agriculture Division and currency headwinds across all Divisions more than offset cost synergies.

DowDuPont achieved year-over-year cost synergies of approximately $400 million in the quarter, and since merger close has now delivered more than $2.2 billion of cost savings.

The Company returned $2.4 billion to shareholders in the quarter through dividends ( ~$0.8 billion ) and share repurchases ( ~$1.6 billion ). Since merger close, the Company has returned nearly $12.5 billion to shareholders.

"Each business aggressively managed the levers within our control and benefitted from the strong foundations we have put in place in the face of discrete headwinds, including the effects of unprecedented bad weather, margin compression in key value chains, and sluggish auto and smartphone market conditions.

"Our emphasis on innovation and valued-added, higher margin products enabled us to benefit from stronger pricing in both our Specialty Products and Agriculture Divisions. We also advanced our cost synergies with an additional $400 million of savings in the quarter and we completed our $3 billion share repurchase program, repurchasing $1.6 billion in the quarter," said Ed Breen , chief executive officer of DowDuPont .

"In 30 days, we expect to complete our journey to create three leading companies in the materials science, agriculture and specialty products industries from the combination of two world-class organizations. I am confident that each of the companies we have created is a compelling investment opportunity in their respective space, with attractive financial characteristics and capital allocation policies, best-in-class cost structures and innovation priorities to accelerate growth.

"What we have accomplished would not have been possible without our highly talented and experienced leadership teams and their organizations. I want to thank each of my colleagues and wish them well as we move forward as new Dow, Corteva and new DuPont."

Agriculture

Net sales of $3.4 billion decreased 11 percent from the year-ago period. In the quarter, volume declined 7 percent, price increased 1 percent, and currency was a headwind of 5 percent, largely driven by the Euro, other Eastern European currencies and the Brazilian Real.

In the United States , the effects of flooding in the western corn belt, as well as cold and wet weather throughout the rest of the country, delayed seed shipments into the second quarter and decreased sales of early season crop protection products. Volume declined 23 percent in the U.S. in the quarter and price was about flat relative to the year-ago period.

Volume and price growth were generally strong outside of the U.S.

Volume increased 7 percent in EMEA, 7 percent in Asia Pacific , and 1 percent in Latin America . Volume in Canada declined 2 percent.

Price increased 6 percent in Latin America , 7 percent in Asia Pacific , 8 percent in Canada , and 1 percent in EMEA.

Operating EBITDA of $667 million decreased 25 percent from the year-ago period, driven by the impact of decreased sales in the corn belt, which are expected to be largely recovered in the second quarter. Synergy benefits were more than offset by higher input costs and negative currency impacts.

Sales in Crop Protection decreased 5 percent with increased price of 3 percent more than offset by 2 percent lower volume and currency headwinds of 6 percent. All regions outside North America delivered strong volume gains. Severe weather-related disruptions in North America drove an overall net volume decrease of 2 percent. Volume gains in EMEA, Latin America and Asia Pacific were driven by strength in the insecticide portfolio.

Sales in Seeds decreased 15 percent. Volume decreased 10 percent, primarily driven by weather in the corn belt, delaying seed deliveries into the second quarter. Volume in the U.S. & Canada was also impacted by early deliveries of seed in the fourth quarter of 2018. Volume increases in EMEA were largely driven by favorable weather leading to a strong corn season. Currency negatively impacted sales by 5 percent and pricing was about flat.

The Agriculture division confirms full year guidance of operating EBITDA of about $2.8 billion . Sales are expected to be flat with organic sales up low single digits percent. The division expects to overcome the first half decline through realization of price and volume opportunities on high demand products and new product launches and accelerated cost synergy delivery, resulting in an improvement in second half performance versus prior year.