(Reuters) - DowDuPont DWDP.N, formed by the merger of chemical giants Dow Chemical and DuPont, revealed third-quarter profit estimates on Thursday that were much higher than Wall Street's expectations ahead of the combined company's first earnings report next week.
Shares of the world’s largest chemical maker rose 2 percent, hitting their highest since they started trading on Sept. 1.
The preliminary figures offered investors an early look into the performance of the combination, which brought together an array of businesses that make chemicals for industries including automobiles, cosmetics and agriculture.
DowDuPont said it expects to have earned 55 cents per share on an adjusted pro forma basis in the third quarter, up 10 percent from last year. Analysts are currently expecting 40 cents per share on average.
The merger has been seen by analysts as a way to streamline the companies’ sprawling operations by combining overlapping businesses.
“Improving culture within the companies is helping topline growth,” analyst Jonas Oxgaard of Bernstein said.
Dow and DuPont had both been struggling with growth before they made the decision to merge in 2015.
The company said the quarter benefited from higher prices for its products and strong demand for chemicals used by the consumer sector, offsetting hurricanes and weak crop planting conditions in Brazil.
Overall sales rose 8 percent on a proforma basis to $18.3 billion(£13.89 billion).
The results were more positive than it looks, given the company had already factored in hurricanes and troubles in Brazil, said Laurence Alexander, chemical sector analyst with Jefferies.
The company had earlier said its earnings before interest, tax, depreciation and amortisation would be reduced about $250 million due to Hurricane Harvey.
Dow and DuPont completed their $130 billion merger in September. It then made changes to operations in the three units it plans to create, under pressure from investors to run the business more efficiently.
Reporting by Nivedita Bhattacharjee, additional reporting by Karan Nagarkatti; Editing by Supriya Kurane and Saumyadeb Chakrabarty
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