DowDuPont (DWDP, $57.93) Shares Soars on the News of New Buyback Program

Shares of DowDuPont jumped ~8% last Thursday, after the conglomerate reported earnings above analysts’ expectations for the third quarter. An announcement of the new share buyback plan worth $3 billion also helped boost the share price.

Joining the likes of IBM and Royal Dutch Shell, the company during its earnings call said that it would buy back about 2% of its equity shares.

Although revenue of $20.1 billion was slightly below the estimate of $20.23 billion, the company reported a better-than-expected adjusted earnings of 74 cents per share. In terms of sales volume, the company recorded growth of 5%, while in terms of value recorded a growth of 10% on the back of strong demand from automotive and manufacturing customers across all regions.

Edward Breen, DowDuPont’s CEO, also said that the company is also working on its production and distribution channels just in case the negative impact of the U.S.-China trade war worsens. He also added that in-line with the company’s new strategy to be more customer focused, it would undergo a merger to form three more focused companies in 2019. He also said that the company has increased its cost synergies target from the merger to $3.6 billion from $3.3 billion.

Dow Chemical and DuPont shaped the world's largest chemical conglomerate through a $130 billion merger in 2017.