DuPont de Nemours Inc (NYSE:DD) Q3 2016 Earnings Conference Call - Final Transcript
Oct 25, 2016 • 08:00 am ET
Welcome to the DuPont Third Quarter 2016 Conference Call. My name is John, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note that the conference is being recorded.
Now I'll turn the call over to Greg Friedman, Vice President of Investor Relations. Greg, you may begin.
Thank you, John. Good morning, everyone, and welcome. Thank you for joining us for our discussion of DuPont's third 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. I direct you to Slides 1 and 2 of 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 reconciliation to GAAP statements provided with our earnings news release in today's slides, which are posted on our website. Our agenda today will start with Ed providing his perspective on the company's performance and the advancement of our strategic initiatives. Then Nick will review our third quarter financial results 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.
Thank you, Greg. Good morning, everyone. Today I'd like to give an update on our third quarter performance and the progress we're making with our three strategic priorities. We continued our first-half momentum in the third quarter. Highlights were sales and volumes grew; gross margins improved; our operating costs declined; segment operating earnings increased; operating margins expanded in all reportable segments; and free cash flow improved.
Total sales increased 1%. Total volumes increased 3% despite a tough macroeconomic backdrop. Five of the six reportable segments grew volumes. Performance Materials, Agriculture, and Nutrition & Health contributed the most to the company's volume improvement. Drivers included strength in the global automotive market for Performance Materials, higher corn seed and soybean volumes, and growth in probiotics, cultures and ingredient systems for Nutrition & Health. 5% volume growth in Industrial Biosciences reflected strong demand for bioactives and biomaterials.
Prices for the total company declined 2%, partly due to the pass-through of lower raw material costs. Operating earnings totaled $0.34 per share, which was a significant improvement versus last year's $0.13 per share. Notably, all of our businesses contributed to the increase in segment operating earnings. While