Executive Summary

Sales grew 5% YoY to $7.42B on 6% volume growth (all segments positive), while local price fell 1%; operating EPS rose 11% to $1.38, but GAAP EPS fell 16% to $0.97 due to transaction and restructuring costs .
Segment operating margins expanded ~80 bps YoY; E&C, Industrial Biosciences and Agriculture led profit growth; Performance Materials faced raw material headwinds and an ethylene cracker turnaround that capped upside .
Currency hedging and subsidiary positions resulted in $140M pre-tax exchange losses in Q2 (vs. $15M in Q2’16), while the effective tax rate fell to 13.0% (from 23.0%) .
Dow–DuPont merger expected to close in August with $3B cost synergy target; integration plans positioned to begin immediately—an important stock catalyst alongside improving innovation-driven volume growth .

What Went Well and What Went Wrong

What Went Well
- Broad-based volume growth: Sales +5% on +6% volume, with volume growth in all reportable segments; E&C (+11% sales) and Industrial Biosciences (+11%) stood out .
- Operating leverage: Operating EPS +11% YoY to $1.38; segment operating margins expanded ~80 bps YoY; Agriculture, E&C and Industrial Biosciences delivered double-digit operating earnings growth .
- Strategic execution: “Our increased operating earnings per share and strong sales growth of 5 percent were driven by volume growth from our highly productive innovation pipeline,” said Chairman & CEO Ed Breen; merger readiness and synergy projects are set to launch upon closing .
What Went Wrong
- GAAP EPS compression: GAAP EPS fell 16% YoY to $0.97 on significant transaction and restructuring costs; non-GAAP adjustments were material this quarter .
- Pricing pressure and costs: Local price declined 1% at the total company; Agriculture saw price pressure in crop protection (LatAm/Asia), and Performance Materials faced higher raw materials plus the planned cracker turnaround .
- FX drag: Exchange losses were sizable at $140M pre-tax in Q2 versus $15M in Q2’16, partly offset by tax effects, but still a headwind to reported results .

Financial Results

Key metrics by period

Metric	Q2 2016	Q4 2016	Q1 2017	Q2 2017
Net Sales ($USD Millions)	$7,061	$5,211	$7,743	$7,424
Diluted EPS – GAAP (Continuing Ops)	$1.16	$0.29	$1.52	$0.97
Operating EPS (Non-GAAP)	$1.24	$0.51	$1.64	$1.38
Adjusted EBITDA (from operating earnings, $MM)	$1,850	$1,002	$2,136	$1,848
Effective Income Tax Rate (GAAP)	23.0%	28.6%	14.3%	13.0%

Q2 2017 change vs. prior year and prior quarter (calculated from figures above)

Metric	YoY Δ vs Q2 2016	QoQ Δ vs Q1 2017
Net Sales	+5.1% (calc from $7,424 / $7,061 )	-4.1% (calc from $7,424 / $7,743 )
GAAP EPS	-16.4% (calc from $0.97 / $1.16 )	-36.2% (calc from $0.97 / $1.52 )
Operating EPS	+11.3% (calc from $1.38 / $1.24 )	-15.9% (calc from $1.38 / $1.64 )
Adjusted EBITDA	-0.1% (calc from $1,848 / $1,850 )	-13.5% (calc from $1,848 / $2,136 )
Effective Tax Rate (pp)	-10.0 pp (13.0% vs 23.0% )	-1.3 pp (13.0% vs 14.3% )

Segment performance (Q2 2017 vs Q2 2016)

Segment	Net Sales Q2’16 ($MM)	Net Sales Q2’17 ($MM)	YoY %	Operating Earnings Q2’16 ($MM)	Operating Earnings Q2’17 ($MM)	YoY %
Agriculture	3,218	3,446	+7.1% (calc)	865	963	+11.3% (calc)
Electronics & Communications	494	546	+10.5% (calc)	93	116	+24.7% (calc)
Industrial Biosciences	355	395	+11.3% (calc)	62	76	+22.6% (calc)
Nutrition & Health	835	818	-2.0% (calc)	130	135	+3.8% (calc)
Performance Materials	1,335	1,381	+3.4% (calc)	325	329	+1.2% (calc)
Protection Solutions	786	801	+1.9% (calc)	188	191	+1.6% (calc)

KPIs and notable items

KPI	Q2 2016	Q1 2017	Q2 2017
Net Debt ($B)	$5.261 (Jun-16)	$4.461 (Mar-17)	$7.331 (Jun-17)
Free Cash Flow YTD ($B)	$(1.967) (H1’16)	$(1.954) (Q1’17)	$(4.579) (H1’17)
Corporate Expenses (Non-GAAP) % of Sales	1.2% (Q2’16)	n/a	0.7% (Q2’17)
Exchange Losses (pre-tax, $MM)	$(15) (Q2’16)	$(59) (Q1’17)	$(140) (Q2’17)
Dividends per Share	$0.38 (Q2’16)	$0.38 (Q1’17)	$0.38 (Q2’17)
Effective Tax Rate (GAAP)	23.0% (Q2’16)	14.3% (Q1’17)	13.0% (Q2’17)

Notes: Management highlighted H1 free cash flow improved by about $200M excluding ~$2.8B higher pension contributions; net debt increased due to normal seasonal working capital and debt raised to fund discretionary pension contributions .

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Guidance	Change
Dow–DuPont merger timing	Closing	1H 2017 (prior communications)	“Expected to close in August”	Updated timing (narrowed to August)
Cost synergies target	Post-merger	$3B target	$3B target; projects ready to launch on closing	Maintained
FY Capex	FY 2017	In line with D&A	In line with D&A	Maintained
Dividends	FY 2017	~$1.3B (pre-merger plan; post-merger at Board’s discretion)	~$1.3B (pre-merger; post-merger at DowDuPont Board’s discretion)	Maintained
Segment outlook (2H)	2H 2017	n/a	Detailed qualitative outlook by segment (see Themes)	New qualitative color
EPS/Revenue guidance	n/a	n/a	Not provided in Q2 release	n/a

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2016 and Q1 2017)	Current Period (Q2 2017)	Trend
Merger/regulatory	Expected close in 1H17; conditional EC approval; FMC swap announced; synergy pipeline >$3B	“Expected to close in August”; integration planning enables quick synergy launch ($3B)	Closer to closing; execution focus
Raw materials & costs	Rising butadiene/benzene; PM benefited from lower costs in 2016; prep for 2Q cracker turnaround	PM pressured by higher raws and planned ethylene cracker turnaround; local price +2% in PM to partially offset	Cost headwinds moderate growth
Agriculture macro & mix	Farm income pressure; shift from corn to soybeans; timing shift benefits 1H	Strong CP demand; U.S. farm income still pressured; Brazil farmers delaying purchases amid price pressure; seed timing benefit H1 ~$200M	Mixed: volume strong; pricing/macro headwinds persist
Innovation pipeline	Leptra corn, Xtend soybeans, Zorvec fungicide, Qrome limited launch in 2017	Continued strong pipeline traction (e.g., Zorvec, Vessarya, probiotics); volume growth led by biomaterials and E&C end-markets	Sustained product-led growth
FX and hedging	Q4’16 had net exchange gains; Q1’17 net exchange losses amortized	Q2’17 pre-tax exchange losses of $(140)M; tax effects muted net impact	Renewed FX drag
Regional demand	EMEA/APAC growth pockets; PV demand softer in China	Asia Pacific +10% sales; EMEA +1% in Q2; PV module growth mid-single-digits expected YoY	APAC strength continues; PV growth slower

Management Commentary

“Our increased operating earnings per share and strong sales growth of 5 percent were driven by volume growth from our highly productive innovation pipeline.” — Ed Breen, Chairman & CEO .
“Segment operating margins expanded by about 80 basis points, led by improvements in Electronics & Communications, Industrial Biosciences and Agriculture.” .
Agriculture: “Operating earnings…increased…on volume growth…partially offset by declines in local price and higher product costs. Volume growth was driven by increased insecticide and fungicide sales…higher soybean sales in North America.” .
Performance Materials: “Operating earnings…increased…as volume growth, higher local price, and the absence of costs associated with a contractual claim were largely offset by higher raw material costs and the planned turnaround of the ethylene cracker.” .

Q&A Highlights

The full Q2 2017 earnings call transcript was not available in our document set. Key prepared remarks and slide commentary emphasized: merger closing in August and synergy execution readiness ; segment-specific demand and cost dynamics into 2H (e.g., PV moderating growth, FX, raw materials, Brazil ag timing) . No additional Q&A clarifications could be reviewed due to the absence of a transcript in the corpus.

Estimates Context

S&P Global consensus estimates for CTA-PA were unavailable via our tool due to a CIQ mapping issue (missing SPGI mapping for CTA-PA). As a result, we cannot present vs-consensus comparisons for revenue/EPS this quarter through S&P Global. If you want, we can attempt an alternative ticker mapping or cross-check via another source for qualitative context.

Key Takeaways for Investors

Mix of strength and noise: Underlying demand was healthy (all segments positive volume), but FX losses, raw materials and planned maintenance obscured GAAP results; focus on operating metrics and margin breadth across segments .
Agriculture momentum with pricing caution: CP and soybean volumes strong, but crop protection pricing pressure (LatAm/Asia) and farm income headwinds temper outlook; watch Brazil order timing and North America acreage mix into 2H .
Performance Materials pacing: Auto/semi demand solid; raw materials and the ethylene cracker turnaround are transitory headwinds—pricing actions (+2% local price) help offset .
E&C/Industrial Biosciences compounding: Double-digit sales and operating earnings growth reflect secular tailwinds (smartphones/IoT/semis; biomaterials/bioactives) and stronger PV contributions (albeit at moderated market growth) .
Balance sheet/CF optics skewed by pension: H1 free cash flow and net debt trends reflect discretionary pension funding; underlying operating trajectory improved excluding this effect .
Merger closing is the near-term catalyst: August close and $3B synergy execution are likely the dominant stock drivers near-term; integration pace/timing and separation plans into 3 companies will shape medium-term value realization .

Appendix: Additional Data Points

Corporate expenses (Non-GAAP) fell to 0.7% of sales in Q2 from 1.2% last year, reflecting sustained cost discipline ahead of merger synergies .
Base income tax rate from continuing operations (Non-GAAP) was 23.4% in Q2 vs 22.5% in Q2’16; effective rate fell to 13.0% due to the mix of significant items and exchange effects .
H1 2017 operating EPS of $3.02 up 21% YoY; GAAP EPS $2.50 down 2% YoY, highlighting the impact of significant items .

Sources: DuPont Q2 2017 Form 8-K press release and supplemental schedules ; Q1 2017 8-K for trend and H1 guidance ; Q4 2016 8-K for prior-quarter baseline .

EIDP, Inc. (CTA-PA)·Q2 2017 Earnings Summary