International. In preliminary figures provided by BASF for fiscal 2017, the company's sales, operating income (EBIT) before special items and EBIT are significantly above the prior-year level. Earnings figures significantly exceed analysts' estimates.
Sales increased by 12% to €64.5 billion (2016: €57.6 billion). EBIT before special items for 2017 is expected to be €8.3 billion, up 32% from the previous year's figure (2016: €6.3 billion). The year-on-year earnings growth is mainly due to the strong increase in earnings in the chemicals segment. Higher volumes and margins in the Monomers, Petrochemicals and Intermediates divisions are the main contributing factors.
Significant earnings improvements in the Oil and Gas and Other segments also contribute to considerably higher EBIT for the BASF Group before special items. EBIT before special items in the Performance Products and Functional Materials & Solutions segments is below 2016 levels. This is mainly the result of rising commodity prices, which could not be fully transferred through sales prices, and higher fixed costs since the start of new plants. Due to a strong profit increase in the fourth quarter, EBIT before special items in the Agricultural Solutions segment almost matched the 2016 level.
For the full year 2017, BASF Group EBIT is expected to increase by 36% to €8.5 billion (2016: €6.3 billion). Net income is expected to exceed the previous year's level by 50% and reach around €6.1 trillion (2016: €4.1 trillion). The reduction in the U.S. corporate tax rate from 35% to 21% results in non-cash deferred tax revenue of nearly €400 million in the fourth quarter of 2017.
