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DuPont earnings up 11% as sales gain
DuPont, the third-biggest US chemical producer, said second-quarter profit rose 11 per cent as record crop prices boosted sales of pesticides and genetically modified seeds.
- Bloomberg
- Published: 00:03 July 23, 2008
New York: DuPont, the third-biggest US chemical producer, said second-quarter profit rose 11 per cent as record crop prices boosted sales of pesticides and genetically modified seeds.
Net income increased to $1.08 billion, or $1.18 a share, from $972 million, or $1.04, a year earlier, Wilmington, Delaware-based DuPont said on Monday in a statement.
The results topped analysts' estimates, and the company raised the low end of its 2008 profit-forecast range.
Chief executive Charles O. Holliday Jr. is expanding outside the US and investing in the Pioneer unit, the world's second-largest seed producer, as record grain prices give farmers more to spend on modified crops and pesticides.
Profit from agricultural products jumped 18 per cent, compensating for declines in other units, DuPont said.
"Ag remains a bright spot,'' Kevin McCarthy, a New York- based analyst at Banc of America Securities, said in a July 14 report.
"Fixed cost control, favourable agricultural trends and healthy demand from emerging markets should help offset US and EU economic deceleration and cost headwinds.'' He rates the shares "neutral.''
Profit was $1.11 a share, excluding the benefits of a litigation settlement and a lower tax rate, topping the $1.07 average estimate of 14 analysts in a Bloomberg survey.
DuPont rose 85 cents, or 1.9 per cent, to $44.90 as of 7.04am in trading before the official opening of the New York Stock Exchange.
2008 outlook
Profit in 2008 will rise to $3.45 to $3.55 a share, DuPont said. Analysts in the Bloomberg survey had estimated $3.50, on average. The company in April had forecast $3.40 to $3.55.
Profit in the second half, which will be evenly split between the third and fourth quarters, will be "modestly lower'' than a year ago, DuPont said.
Higher energy and raw-material costs, lower demand in some developed markets, less income from asset sales and a higher base tax rate will hurt earnings, the company said.
Net sales gained 12 per cent to $8.84 billion.
The gain reflects seven per cent higher selling prices, a five per cent currency exchange benefit, one per cent higher sales volumes and a one per cent reduction from divestitures, DuPont said.
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