DuPont Profit Tops Estimates; 2010 Forecast Raised
DuPont Co chief executive officer Ellen Kullman. Photographer: Scott Lewis/Bloomberg
DuPont Co., the third-biggest U.S. chemical maker, reported second-quarter profit that beat analysts’ estimates and raised its full-year earnings forecast amid improving global demand.
Second-quarter profit excluding some items was $1.17 a share, topping the 94-cent average estimate of 10 analysts surveyed by Bloomberg. Earnings excluding some items will be $2.90 to $3.05 a share in 2010, exceeding a previous prediction of $2.50 to $2.70 and the $2.64 average estimate of 14 analysts in the Bloomberg survey.
Chief Executive Officer Ellen Kullman cut costs last year and is boosting output as demand rises around the world and across the company’s businesses, including auto paints and plastics, crop seeds and materials used to harness solar power. Sales advanced 26 percent to $8.62 billion, driven by a 21 percent increase in sales volumes.
“It’s a solid quarter and they are underscoring they expect volumes are going to remain fairly strong,” said Jefferies & Co. analyst Laurence Alexander, whose per-share estimate of $1.01 was highest among 10 analysts surveyed. “We had expected a beat driven by electronics and auto refinish, and the upside surprise reflects a broad-based recovery in their end markets.”
DuPont rose $1.37, or 3.5 percent, to $40.36 at 10:05 a.m. in New York Stock Exchange composite trading. The shares gained 16 percent this year through yesterday.
Asia-Pacific
The Asia-Pacific region led year-over-year sales gains with a 47 percent increase, followed by Canada with a 30 percent rise. The region that includes Europe grew 24 percent, and U.S. revenue rose 18 percent.
The higher profit forecast includes $460 million to $480 million in earnings from hypertension medicines Cozaar and Hyzaar, compared with a prior forecast of $360 million to $400 million. The drugs, marketed through Merck & Co., lost patent protection in the U.S. and Europe earlier this year. They contributed $70 million to second-quarter profit.
Second-quarter net income more than doubled to $1.16 billion, or $1.26 a share, from $417 million, or 46 cents, a year earlier.
Rising car production helped earnings to more than double in the coatings unit, the world’s biggest maker of auto paint, and contributed to a sevenfold profit increase in performance materials, which makes plastics for vehicle parts and packaging. U.S. automakers raised output by 70 percent in the second quarter from a year earlier, according to Federal Reserve data.
Electronics Sales
Profit in the electronics and communications unit surged fivefold as sales jumped 53 percent, led by production of photovoltaic materials and growth in the Asia-Pacific region, DuPont said.
Profit in the agriculture unit, the largest business, rose 31 percent to $762 million driven by higher seed sales. DuPont gained 2 percentage points of market share in North American corn seed and 4 points in domestic soybean seed, Chief Financial Officer Nicholas Fanandakis said today on a conference call.
Kullman in November unveiled a plan to increase earnings 20 percent a year through 2012. She said sales gains of at least 10 percent will more than make up for the loss of $1 billion in royalties from Cozaar and Hyzaar.
DuPont, founded in 1802 to make gunpowder, produces thousands of products from Corian countertops and Teflon coatings to Tyvek weather barrier and Kevlar bullet-proof fibers.
Dow Chemical Co. and Exxon Mobil Corp. are the two largest U.S. chemical makers by sales.
To contact the reporter on this story: Jack Kaskey in New York at jkaskey@bloomberg.net.
Rate These Stories
Rate this Page