Du Pont's Beat Doesn't Take Barclays' Focus Off Dow Deal

After the market closed on Tuesday, E I Du Pont De Nemours And Co DD reported second-quarter EPS of $1.24, $0.14 above the Street’s consensus. The main beat was seen in the company’s agricultural segment, where operating earnings were about $100 million (or $0.08 per share) higher than management had guided.

Related Link: Du Pont Provides Upbeat Outlook After Delivering Strong Q2 Numbers

Among the elements helping the agricultural segment were improved product costs and reduced operating expenses. Having said this, Barclays analyst Duffy Fischer pointed out that “industry fundamentals still remain quite bearish, with depressed crop prices leading to lower farmer income & decreased spending.” In fact, he believes “this bearish setup will persist in ag for at least another 2–3 years, driven by grain oversupply.”

The Dow Merger

Financial results aside, Barclays remains focused on Du Pont’s merger with Dow Chemical Co DOW, even though management provided almost no updates on the issue during the earnings call. However, the report added, the deal is expected to close before the end of the year, as it is only missing regulatory approval (boards already green-lit the operation), which the companies feel will go though.

Barclays maintains an Equal-Weight rating and $70 price target on shares of Du Pont.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.