AP News, January 23rd, 2007
Specialty chemicals maker DuPont Co. said Tuesday its fourth-quarter profit more than quadrupled, due mainly to a hefty tax benefit, as well as higher sales and flat fixed costs.
Net income totaled $871 million, or 94 cents per share, up sharply from last year's profit of $154 million, or 16 cents per share. The latest quarter included a net gain of $449 million, or 49 cents per share, mainly due to tax benefits and insurance recoveries from hurricanes Katrina and Rita, partly offset by charges for restructuring, an asset impairment and accounting adjustments. Fourth-quarter 2005 results included a gain of $28 million, or 3 cents per share.
Excluding items, the company posted profit of 45 cents per share in the latest period, up from 13 cents last year.
Total sales climbed 8 percent to $6.28 billion from $5.83 billion a year ago, due in part to higher local selling prices and a 2 percent currency benefit.
Analysts surveyed by Thomson Financial were looking for profit of 45 cents per share on slightly higher sales of $6.30 billion.
"This was a strong fourth quarter for our company with improved business results across the board and strong growth outside of the United States," said chairman and chief executive officer Charles Holliday Jr.
DuPont said worldwide volumes grew 4 percent, primarily from strong volume growth outside the U.S. and higher sales of engineering and packaging polymers, elastomers, and crop protection and seed products.
Volume grew by double digits in Asia and the Canada-Latin America region but dropped 5 percent in the U.S., reflecting lower sales into residential construction and automotive markets, largely due to customers' efforts to reduce inventories, the company said.
For the year, DuPont reported earnings of $3.38 per share, compared to $2.07 in 2005. Earnings before significant items were $2.88 per share, up 23 percent from $2.34 for 2005. Net sales increased from $26.6 billion to $27.4 billion.
Holliday said return on invested capital reflected the positive impact of the company's growth strategies and efforts to increase value.
"We will build on this momentum in 2007," he said.
The company reaffirmed its 2007 outlook of about $3.15 earnings per share, compared with Wall Street's $3.22 per share consensus, and said it sees modest volume gains as continued growth outside the United States is expected to outweigh slower growth in U.S. housing and automotive markets.
DuPont said it expects volatility in energy and ingredient costs to continue, but for the full year, sees average costs about equal to 2006.
The company said raw material costs in the fourth quarter were about $80 million, or 3 percent, higher than in the fourth quarter of 2005.
Sales in the agriculture and nutrition unit increased 17 percent to $1.1 billion, but the unit recorded a pretax loss of $350 million, compared to a loss of $272 million in the final quarter of 2005. The most recent quarter included a $194 million restructuring charge and pretax operating income excluding significant items increased $114 million, largely due to higher sales in both seeds and crop protection chemicals, the company said.
Pretax operating income in the coatings and color technologies unit increased 31 percent excluding significant items, as higher titanium dioxide sales and a gain on the sale of assets more than offset the impact of lower automotive OEM coatings volumes. Fourth-quarter sales of $1.6 billion were up 7 percent.
Sales in performance materials also rose 7 percent to $1.7 billion, with pretax operating income more than doubling to $126 million from $55 million in the hurricane-impacted fourth quarter of 2005.
DuPont shares fell $1.53 to $48.57 in morning trading Tuesday on the New York Stock Exchange.
