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DuPont Announces Q2 2012 Results; Reports 7% Growth in Net Sales

Published on 2012-07-25. Author : SpecialChem

WILMINGTON, Del. --

Highlights:

  • Second-quarter 2012 earnings were $1.48 per share versus $1.37 per share in the prior year, excluding significant items from both periods. Reported second-quarter earnings were $1.25 per share versus $1.29 per share in the prior year


  • Sales increased 7 percent to $11.0 billion reflecting 6 percent higher local prices and a 5 percent increase from portfolio changes, partially offset by a 3 percent reduction from currency and 1 percent lower sales volume. Sales in developing markets grew 11 percent.


  • Segment pre-tax operating income, excluding pharmaceuticals and significant items, increased 13 percent, principally attributable to higher earnings from Agriculture and Performance Materials and a prior-year acquisition benefiting Nutrition & Health and Industrial Biosciences.


  • For the first half of 2012, Agriculture delivered 15 percent sales growth and 16 percent higher pre-tax operating income excluding significant items, reflecting strong northern-hemisphere business performance across both seed and crop protection product lines.


  • The company is on track versus its full-year 2012 productivity targets for fixed costs and working capital. Year-to-date fixed cost productivity totals $190 million.


  • DuPont expects full-year earnings to be toward the lower end of its existing outlook range of $4.20 to $4.40 per share, excluding significant items, due to uncertainties associated with macros and currency as well as a higher tax rate related to earnings mix. Prior year earnings were $3.93 per share on a comparable basis.

"Our agriculture, food and bioscience businesses are performing exceptionally well globally, and our advanced materials businesses are achieving solid results despite slower growth in some key markets and continued weakness in Europe," said DuPont Chair and CEO Ellen Kullman. "Our global teams continue to execute well in a dynamic environment, while investing for growth driven by science-powered innovation and collaboration."

Global Consolidated Sales and Net Income

Second-quarter 2012 consolidated net sales of $11.0 billion were 7 percent higher than the prior year reflecting 6 percent higher local prices and a 5 percent net increase from portfolio changes, partly offset by a 3 percent negative currency impact and 1 percent lower volume. Second-quarter 2012 net income attributable to DuPont was $1,179 million versus $1,218 million in 2011. Excluding significant items, net income attributable to DuPont of $1,394 million increased $95 million, or 7 percent, from $1,299 million in the second quarter 2011.

The following is a summary of business results for each of the company's reportable segments, comparing second quarter 2012 with second quarter 2011, for sales and PTOI, excluding significant items. References to selling price are on a U.S. dollar basis, including the impact of currency.

Agriculture - Sales of $3.4 billion were up $0.4 billion, or 13 percent, with 7 percent price and 6 percent volume gains. Pioneer seed maintained its momentum delivering 12 percent sales growth on agriculture macros and strong business performance in North America corn and soybeans. Crop Protection sales growth of 15 percent was underpinned by strong demand across all product lines. PTOI of $926 million improved 12 percent on strong sales performance partially offset by input cost increases in seeds, unfavorable currency impact and higher investments in Right Product Right Acre commercial and R&D activities.

First half sales of $7.5 billion were up $1.0 billion, or 15 percent, with 8 percent volume and 7 percent price gains. Pioneer seed sales growth of 16 percent reflects strong northern hemisphere performance with global price and volume gains on new product penetration. Crop Protection sales growth of 11 percent reflects continued strong demand in all product lines with standout performance in insect control products. PTOI for the first half of $2.2 billion improved 16 percent on higher volume and price partially offset by input cost increases in seeds, unfavorable currency impact and higher spending for growth investments.

Electronics & Communications - Sales of $795 million were down 11 percent on 6 percent lower volume and 5 percent lower selling prices, primarily pass-through of lower metals prices. Sales reflect continued soft demand for photovoltaic materials, though up sequentially from first quarter. Volume decline in photovoltaics was partially offset by increased demand for smart phones and tablets. PTOI of $75 million declined $28 million from lower volume and plant utilization. Additionally, PTOI in the prior year included a $20 million reduction due to extreme volatility in metals prices.

Industrial Biosciences - Sales of $300 million were up $177 million, primarily due to two months acquisition benefit from the Danisco enzyme business. Biomaterial sales into apparel and carpeting accounted for a 10 percent volume increase. PTOI of $44 million was up $34 million benefiting from the acquisition and realization of cost synergies. PTOI includes $5 million of amortization expense associated with the fair value step-up of acquired intangible assets.

Nutrition & Health - Sales of $885 million were up $399 million, or 82 percent, primarily reflecting two months acquisition benefit from the Danisco specialty food ingredients business. Higher volume reflects continued strong demand in Solae specialty soy products. PTOI of $112 million was up $74 million benefiting from the acquisition, realization of cost synergies and favorable product mix in Solae. PTOI includes $20 million of amortization expense associated with the fair value step-up of acquired intangible assets.

Performance Chemicals - Sales of $2.0 billion were down 1 percent, with 10 percent lower volume partially offset by 9 percent higher selling prices. Higher selling prices more than offset higher ore costs. Lower volume reflects continued softness in titanium dioxide, particularly in Asia Pacific and Europe, and weakening demand in fluoropolymers. PTOI of $538 million increased $35 million on higher selling prices and continued productivity actions.

Performance Coatings - Sales of $1.1 billion were down 1 percent, with 2 percent lower volume partially offset by 1 percent higher selling prices. OEM volume growth in North America and Asia Pacific was more than offset by lower refinish and powder coatings volume, particularly in European markets. Higher local selling prices across all regions and market segments were partially offset by the impact of unfavorable currency. PTOI of $92 million increased $19 million on higher selling prices, mix enrichment and continued productivity actions, partially offset by unfavorable currency.

Performance Materials - Sales of $1.7 billion were down 3 percent, primarily reflecting a 3 percent reduction from a portfolio change and 1 percent lower selling prices, partially offset by 1 percent higher volume. The lower selling prices were primarily affected by unfavorable currency. Volume growth in packaging markets and continued strong demand in the automotive market, particularly in North America, were partially offset by softness in the industrial and electronic markets. PTOI of $317 million increased $63 million due to lower feedstock costs and higher volume, partially offset by unfavorable currency.

Safety & Protection - Sales of $986 million were down 4 percent, with 5 percent lower volume partially offset by 1 percent higher selling prices. Volume declined due to lower public sector demand and continued softness in industrial markets. Higher local selling prices from value-based pricing were partially offset by the impact of unfavorable currency. PTOI of $127 million decreased $16 million on weaker mix, unfavorable currency and higher spending for growth initiatives, partially offset by value-based pricing actions.

Outlook

DuPont expects full-year earnings to be toward the lower end of its existing outlook range of $4.20 to $4.40 per share, excluding significant items, due to uncertainties associated with macros and currency as well as a higher tax rate related to earnings mix. Prior year earnings were $3.93 per share on a comparable basis.

About DuPont

DuPont has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders they can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment.

Forward-Looking Statements:
This news release contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "anticipates," "believes," "intends," "estimates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company's intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

Source: DuPont


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