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DuPont Announces First Quarter 2006 Business Segment Performance

Published on 2006-04-26. Author : SpecialChem

DuPont reported first quarter earnings of $.88 per share. Excluding significant items, earnings for the quarter were $.93 per share, compared to $.96 per share last year.

Segment pretax operating income (PTOI) for first quarter 2006 was $1.3 billion, including a restructuring charge of $135 million for the Coatings & Color Technologies segment. Following are summaries of first quarter 2006 performance for the business segments.

Agriculture & Nutrition

  • PTOI decreased $169 million with current quarter earnings of $588 million versus $757 million in the prior year. The decline reflects negative currency impact, higher cost of goods sold and slightly lower volumes, partly offset by a $28 million gain on the sale of a technology license.
  • First quarter sales of $2.2 billion were down 5 percent, in line with expectations, reflecting negative currency impact and lower seed volumes.
  • Cost of goods sold increased as a result of higher raw material and seed production costs.
  • Important recent pipeline advances include the U.S. launch of corn hybrids with the new Herculex® Root Worm trait and licensing agreements for the company's proprietary herbicide tolerance trait -- Optimum™ GAT™ -- and a new high efficacy insecticide, Rynaxypyr™. DuPont also announced the formation of a joint venture with Syngenta, GreenLeaf Genetics, to out-license genetics and biotech traits.

Coatings & Color Technologies

  • PTOI of $15 million was reduced by a $135 million charge associated with the transformation program in performance coatings. Prior year PTOI was $161 million.
  • First quarter sales were $1.5 billion, down 1 percent. U.S. dollar (USD) prices increased 2 percent, while volumes were 3 percent lower, primarily the result of reduced production earlier in the quarter at the DeLisle TiO2 plant due to hurricane damage. Full production at the plant was restored in March.
  • Higher USD selling prices largely reflect local price improvements for titanium dioxide and refinish products, partly offset by a negative currency impact.
  • The transformation program for the coatings unit focuses the business on higher growth market segments, and is expected to reduce segment costs by $165 million per year.

Electronic & Communication Technologies

  • PTOI was $163 million versus $110 million in the prior year, up 48 percent. Higher sales and lower fixed costs more than offset higher ingredients costs.
  • First quarter sales were $0.9 billion, up 6 percent, with 1 percent higher USD selling prices.
  • Revenue growth principally reflects higher sales volumes and precious metal prices for electronic materials and higher prices and volumes for fluoroproducts. Key growth applications included photovoltaics, semiconductor fabrication, cell phones, and wire and cable.

Performance Materials

  • PTOI was $137 million versus $211 million in 2005, a decline of 35 percent, primarily resulting from significantly higher raw material costs, raw material supply disruptions, and an asset impairment charge of $27 million.
  • First quarter sales of $1.7 billion increased 6 percent on a comparable business basis, reflecting higher selling prices and volumes that more than overcame a negative currency impact.
  • Revenue growth in engineering polymers and elastomers occurred in all major product lines and across all regions.

Safety & Protection

  • PTOI was $269 million versus $231 million in the prior year, largely as a result of sales growth in aramids, nonwovens and solid surfaces. PTOI margins increased moderately as a result of effective manufacturing operations and fixed costs leverage.
  • First quarter sales of $1.4 billion reflected double-digit growth before currency impacts. USD prices increased 5 percent despite negative currency impact, and more than offset higher raw materials costs. Volumes grew in almost all businesses.
  • Demand remained firm across major markets such as personal protection, construction and industrial.

Source: DuPont

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