DuPont off to a good start for 2012, CEO says
NEW YORK (Reuters) - DuPont's (DD.N) first-quarter profit beat Wall Street's expectations, helped by price hikes and sales of insecticides and genetically modified seeds.
The company reaffirmed its 2012 earnings target for a range mostly above expectations, with Chief Executive Ellen Kullman saying specialized products for agricultural and electronics customers would provide much of the lift.
Results from DuPont often serve as a barometer for the global economy since its materials are used to produce a range of items, from cars and homes to televisions and smartphones.
"What you should take away from the first quarter is that we're off to a good start for the year," Kullman said on a conference call with analysts and reporters on Thursday. "We expected slow, sequential improvement and that is what we're seeing."
Wall Street mostly shrugged at the results because it was not as strong a beat as investors have come to expect from DuPont. The company's shares were down 0.4 percent at $53.04 in late-morning trading compared to a small rise in the broader markets.
First-quarter sales in Europe rose 14 percent, largely due to DuPont's 2011 purchase of Danish food ingredients maker Danisco. The buyout reflected Kullman's desire to increase DuPont's presence in the food market.
"We're seeing that many European markets remain weak. Europe is mainly in a recession with its sovereign debt issues," Kullman said. "There are a couple of bright spots, and one is agriculture."
Sales in Asia were flat, partly because of soft demand for titanium dioxide paint pigment from automobile manufacturers.
Sales in the United States and Latin America both spiked.
The company posted net income of $1.49 billion, or $1.57 per share, compared with $1.43 billion, or $1.52 per share, a year earlier.
Excluding a $50 million payment to customers of DuPont's Imprelis herbicide, which damaged some of their trees, the company earned $1.61 per share. By that measure, analysts had expected $1.55, according to Thomson Reuters I/B/E/S.
Sales rose 12 percent to $11.3 billion. Analysts expected $11.23 billion.
For DuPont overall, an 8 percent price hike offset a 2 percent drop in volume, as well as currency charges.
Sales of paints and coatings to the automobile sector in the company's Performance Coatings unit rose 6 percent.
DuPont is trying to sell the unit, and last week asked private equity bidders to team up and make new offers after initial bids fell short of expectations, sources said.
On the conference call, Kullman said she is "particularly proud of our coatings business, which has had an unwavering productivity over the last few years."
Agriculture sales rose 16 percent in the first quarter as farmers stocked up ahead of the North American spring planting season.
Sales of Kevlar, Nomex and other safety equipment slipped 2 percent due to weak demand from industrial customers. Sales of DuPont's bulletproof car kit Armura, made with Kevlar and sold in Brazil, rose 70 percent.
The company affirmed its 2012 earnings forecast of $4.20 to $4.40 per share.
DuPont's results came on the same day Dutch chemical company AkzoNobel NV AKZO.AS, the world's largest paints maker and owner of the Dulux brand, warned that economic uncertainty, even in some emerging markets, as well as high raw materials prices posed challenges this year.
(Reporting By Ernest Scheyder in New York; Editing by Lisa Von Ahn, John Wallace, Dave Zimmerman)
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