AP News, April 24th, 2007
Specialty chemicals maker DuPont Co. said Tuesday its first-quarter earnings increased 16 percent, driven by higher seed sales and improved pharmaceuticals income. The company reaffirmed its full-year guidance for 2007.
The company reported net income of $945 million, or $1.01 per share, up from $817 million, or 88 cents per share, in the first quarter of 2006. Excluding a one-time charge of $52 million, or six cents a share, related to antitrust litigation, earnings totaled $1.07 per share, compared to 93 cents per share a year earlier.
Consolidated net sales rose by $451 million to $7.8 billion, while total revenue increased 6 percent to $8.16 billion from $7.67 billion last year.
Analysts surveyed by Thomson Financial expected earnings of $1.03 per share on revenue of $7.77 billion.
"We're off to a solid start in 2007," said chairman and chief executive officer Charles Holliday Jr.
DuPont reaffirmed its 2007 earnings outlook of about $3.15 per share, excluding the 6-cent-per-share charge for elastomer antitrust litigation. Wall Street is looking for a profit of $3.18 per share.
The company said it continues to expect modest volume gains as growth outside the United States and strong agricultural seed markets outweigh lower demand for its products in the U.S. housing and automotive markets.
"We are well positioned in global industrial and agricultural markets and have an exciting pipeline of new products that customers value," Holliday said.
DuPont noted that sales from its agriculture and nutrition segment increased 13 percent to $2.5 billion in the first quarter, primarily due to strong Pioneer seed sales. Significant global gains in seed corn and cereals herbicides more than offset the impact of lower demand for cotton and soybean products in North America, the company said.
Pretax operating income from pharmaceuticals rose 33 percent, from $169 million to $225 million.
Overall sales grew 6 percent, reflecting 2 percent volume growth, 2 percent higher local currency selling prices and a 2 percent currency benefit. Volume was down slightly in the U.S. but rose 8 percent in the Canada and Latin America region, which matched Europe with sales growth of 11 percent.
Pretax operating income, or PTOI, in the company's coatings and color technologies segment totaled $194 million, up sharply from $21 million in the prior year, which included a $135 million pretax restructuring charge. Excluding the restructuring charge, PTOI grew 24 percent as increased volume and cost productivity gains offset higher ingredient costs. Volume gains of 2 percent reflected post-hurricane share recovery in titanium dioxide and increased sales of refinish paint in Europe, net of lower volumes in automotive OEM and from divested businesses.
PTOI in electronic and communication technologies dropped from $160 million to $124 million as improvements in packaging graphics and inks failed to offset lower refrigerants pricing and lower sales of some electronic materials. Sales grew 4 percent to $920 million.
Excluding the $52 million after-tax charge for antitrust litigation, PTOI in performance materials increased 30 percent to $202 million, led by strong results in packaging and industrial polymers. Sales increased 3 percent to $1.6 billion despite lower volume.
DuPont's safety and protection unit recorded a 9 percent increase in pretax operating income to $291 million, with growth in aramid products and cost productivity gains partially offset by lower volumes in U.S. housing.
