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Dupont raises full-year guidance

28
Apr '10
Dupont reports strong first-quarter 2010 EPS; raises full-year guidance.
Highlights:

• DuPont's first-quarter 2010 earnings per share were $1.24, compared to $.54 in the prior year.
• Sales were $8.5 billion, up 23 percent versus prior year. This reflects 19 percent higher volume, 2 percent higher local selling prices, a 3 percent benefit from currency and a 1 percent reduction from portfolio changes.
• Asia Pacific sales were $1.6 billion with volume up 65 percent in the quarter. Sales in Performance Polymers, Electronics & Communications, and Titanium Technologies were particularly strong. Volumes in emerging markets were also strong, up 28 percent.
• Raw material, energy and freight costs, adjusted for currency and volume, were about 2 percent lower versus prior year. The company expects these costs to trend higher as the year progresses, reflecting a full-year increase of about 5 percent.
• Spending increases for growth initiatives, primarily in Agriculture & Nutrition, and higher non-cash pension expense contributed to an increase in total fixed costs versus 2009. Continued productivity projects and restructuring savings improved fixed costs as a percentage of sales to 37 percent, which is comparable to pre-recession levels.
• Pharmaceuticals first-quarter pre-tax income was $221 million, about $60 million higher than anticipated. The company expects full-year Pharmaceuticals pre-tax income of $360-$400 million.
• DuPont increases its full-year 2010 earnings guidance to a range of $2.50 to $2.70 per share.The previous guidance was $2.15 to $2.45 per share.

“Our intense focus on customers, sustained R&D investments and productivity improvements are delivering growth,” said DuPont Chair and CEO Ellen Kullman. “Macro trends drove first-quarter demand for our science-based innovations, and DuPont was ready. The actions taken last year are benefiting the company as we emerge stronger in 2010.”

Global Consolidated Sales and Net Income
First-quarter 2010 consolidated net sales of $8.5 billion were 23 percent higher than the prior year. This reflects 19 percent higher volume, 2 percent higher local selling prices, and a 3 percent positive impact from currency exchange rates, partly offset by a 1 percent reduction from portfolio changes. The table below shows regional sales and variances versus first quarter 2009.

Net income attributable to DuPont for the first quarter 2010 was $1,129 million versus $488 million in the prior year. The improvement reflects significantly higher sales volume, increased manufacturing capacity utilization, higher selling prices, currency benefit and lower raw material costs, partly offset by fixed cost increases for growth investments and higher non-cash pension expense. The company's productivity and cost-cutting actions are essentially tracking according to plan.

Performance Chemicals – Sales of $1.4 billion increased $344 million, or 32 percent, reflecting a 30 percent increase in volume and 3 percent higher selling prices. The sales increase was primarily driven by strong continued recovery in titanium dioxide and fluoropolymers, with robust demand for refrigerants including strong adoption rates for ISCEON® as a preferred retrofit for R22. PTOI was $190 million, an improvement of $146 million, primarily due to higher volumes.


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