E. I. du Pont de Nemours and Company (NYSE:DD.PRB) Q2 2016 Earnings Conference Call - Final Transcript
Jul 26, 2016 • 08:00 am ET
Welcome to the DuPont Second Quarter 2016 Conference Call. My name is John, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.
And I will now turn the call over to Greg Friedman, Vice President of Investor Relations. Greg, you may begin.
Gregory R. Friedman
Thank you, John. Good morning and welcome. Thank you for joining us for our discussion of DuPont's second quarter 2016 performance. Here with me are Ed Breen, Chair and CEO; Nick Fanandakis, Executive Vice President and CFO; and Jim Collins, Executive Vice President, responsible for our Agriculture segment. The slides for today's presentation and corresponding segment commentary can be found on our website, along with our news release. During the course of this conference call, we will make forward-looking statements, and I direct you to slides one and two for our disclaimers.
All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially. We will also refer to non-GAAP measures. We request that you review the reconciliations to GAAP statements provided with our earnings news release and today's slides, which are posted on our website.
Our agenda today will start with Ed providing his perspective on our performance. Then, Nick will review our second quarter financial performance and 2016 guidance. Third, Jim will discuss our Agriculture business. We will then take your questions.
With that introduction, it's now my pleasure to turn the call over to Ed.
Edward D. Breen
Thank you, Greg, and good morning, everyone. Today, I would like to give you my perspective on the second quarter and update you on our progress with our strategic plan, as well as our mergers with Dow. This was another solid quarter across the board. Our results indicate our plan is working. We posted operating earnings per share of $1.24, a 14% increase from the prior year. Segment operating earnings increased 11%. Thanks to the disciplined execution, we also delivered improvements in several key metrics despite a difficult operating environment.
In fact, this was the second consecutive quarter of improvement in several of the metrics we watch most closely as indicators of fundamental long-term performance. Highlights include organic sales growth, gross margin increased, operating cost declined, operating margins expanded across all reportable segments, and free cash flow and working capital improved. Let's start with sales. I am pleased about the improvement in our sales trend, given the challenging environment in which we are operating.
Sales rose 1%, excluding currency and portfolio changes, with Agriculture and Nutrition & Health leading the improvement. Ag did better than expected in a very challenging market, and N&H grew despite the currency pressure. Volumes grew in half of our businesses and volumes grew in total by 2%. We continue to