AP News, January 9th, 2008
Citing strong fourth-quarter results and prospects for growth in emerging markets, chemical maker DuPont on Wednesday raised its earning outlook for 2007 as well as its profit forecast for 2008.
The company, which makes a range of products from automotive coatings to genetically modified seeds, expects 2007 earnings to be at the upper end of its previously announced range of $3.15 to $3.20 a share, excluding one-time items.
DuPont also boosted its 2008 earnings outlook to a range of $3.35 to $3.55 per share, up from a previous estimate of $3.31 to $3.52 per share.
Analysts surveyed by Thomson Financial have forecast 2007 earnings of $3.19 per share and fiscal 2008 profit of $3.42 per share. Dupont will report its fourth quarter and full-year 2007 results on Jan. 22.
Shares jumped 4.8 percent, or $2.03, to $44.78 Wednesday, but remained well off the 52-week high of $53.90.
DuPont chairman and chief executive officer Charles Holliday Jr. said 2007 earnings growth will be 11 percent or better, despite higher raw material prices and the sluggish housing and automotive markets. DuPont also makes flooring used in homes.
"We expect that continued growth worldwide from our agriculture and nutrition business segment and growth from all of our segments in emerging markets will more than compensate for a slower U.S. economy," Holliday said.
Carl Lukach, vice president of investor relations for DuPont, said the agriculture and nutrition business has been particularly strong in Brazil, and that growth in emerging markets such as China, India and Eastern Europe has averaged about 15 percent.
Lukach said DuPont has kept a close eye on sales recently amid speculation that the U.S. economy is headed for a recession.
"To me it's very significant because of the uncertainty that's out there among investors and shareholders about how the economies are shaping up," he said of Dupont's outlook.
Wilmington-based DuPont also announced after-tax estimates of significant items it expects to record in the fourth quarter, including a charge of about $135 million to adjust the carrying value of its investment in a polyester films joint venture. The company said a rapid increase in the cost of petroleum-related raw materials costs and adverse market conditions have negatively affected the venture's operations in North America and Europe.
Lukach declined to provide details of the joint venture but DuPont said it is taking steps to improve the value of the business.
"All of the options are open to us, and we're very actively looking at all those options now," he said.
On the flip side, the company announced after-tax benefits of $112 million related to tax audit issues and $46 million from the reversal of reserves for elastomers antitrust litigation
Last month, DuPont announced that it will build a $500 million plant in South Carolina to help expand its production of Kevlar, the single-largest investment in Kevlar since the tough fiber used in bulletproof vests and other protective gear was invented more than 40 years ago.
