(Bloomberg) -- DuPont Co. posted first-quarter earnings that exceeded all analysts’ estimates amid higher sales of crop seeds and pesticides as the company awaits regulatory approval for its historic merger with Dow Chemical Co.
The agriculture business halted three years of declining first-quarter sales with a 3.8 percent gain, DuPont said in a statement. The increase was driven by improvement in Latin America and a change in the timing of U.S. seed deliveries that added $140 million to revenue, the company said in a slide presentation. Monsanto Co., the world’s biggest seed producer, this month also reported results that topped expectations.
“Agriculture came in strong as expected as strength in South America and the pulling of sales from” the fourth quarter into the first quarter countered “weakness in North America,” Jonas Oxgaard, an analyst at Sanford C. Bernstein & Co. said in a note Tuesday.
DuPont got an additional boost from materials used in electronics, solar panels and automobile parts, as higher prices and sales volumes combined to boost total revenue about 5 percent. Sales rose in five of DuPont’s six businesses. The $78.7 billion merger with Dow is expected to close in August as the companies line up asset sales to secure antitrust clearance, according to the DuPont statement.
First-quarter earnings excluding some items rose to $1.64 a share at DuPont, exceeding the highest estimate in a Bloomberg survey, the average of which was $1.39. Revenue increased to $7.74 billion. Analysts had predicted $7.51 billion.
Operating earnings in the first half will be about $2.90, up 16 percent from a year earlier, DuPont said. That implies second quarter earnings of $1.26 a share, trailing the $1.31 average estimate.
The shares rose 2 percent to $80.99 before the start of regular trading in New York.
DuPont Chief Executive Officer Ed Breen is trying to win U.S. regulatory approval of the Dow merger. Antitrust authorities in Europe are requiring DuPont to sell pesticide assets, including top-selling Rynaxypyr insecticide, which last year generated $450 million in earnings on revenue of $1.4 billion. The combination of the largest U.S. chemical makers, announced in December 2015, repeatedly has been delayed by government reviews.
The company and Dow plan to split the merged company into three publicly traded entities within 18 months of closing. One would serve agriculture markets; another, dominated by Dow businesses, would focus on plastics; and the third would make specialty materials.
To contact the reporter on this story: Jack Kaskey in Houston at [email protected]
To contact the editors responsible for this story: Brendan Case at [email protected], Bruce Rule
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