Chemicals maker DuPont (DD.N) forecast further strong growth in demand for its seeds and pesticides after it more than doubled quarterly profit, reinforcing a push into food and agriculture that has eased its dependence on paint pigments.
Sales in DuPont's agricultural business rose 14 percent in the first quarter as the worst dry spell in decades encouraged U.S. farmers to buy its drought-hardy seeds and crop-protection products to boost yields.
"As we look to the second quarter, we expect (agricultural) sales growth similar to the first quarter," said Jim Borel, executive vice-president of DuPont's Agriculture and Nutrition & Health units.
DuPont shares were up 4 percent at $52.27 on the New York Stock Exchange in late-afternoon trading.
The 210-year-old company is focusing on food and agricultural products that are less exposed to ebbs and flows in sales of its titanium dioxide paint pigment, part of its performance chemicals business.
The shift is evident in the $5 billion sale of its car paint unit last year and the $6 billion purchase of nutritional supplements maker Danisco in 2011.
DuPont's agricultural business contributed almost 45 percent to the company's revenue in the first quarter. The performance chemicals business, which includes titanium dioxide, accounted for about 15 percent.
Sales in the performance chemicals business slid 17 percent.
Borel said he expected a "strong finish" to the grain-planting season in the northern hemisphere to drive sales growth in the current three months.
Strong wheat, corn and soybean prices spurred DuPont's first-quarter agricultural sales in the Americas, and have also helped boost sales for rivals Monsanto Co (MON.N) and Syngenta AG (SYNN.VX).
The growth has overshadowed an ongoing decline in demand for DuPont's once-lucrative titanium dioxide -- a trend that is likely to continue in the second quarter.
"We expect strong growth again in our agriculture segment and tough comparisons to prior-year peak levels in performance chemicals," DuPont Chief Executive Ellen Kullman said on a post-earnings conference call.
'MUCH SMALLER FACTOR'
DuPont's net income jumped to $3.35 billion, or $3.58 per share, in the first quarter, from $1.49 billion, or $1.58 per share, a year earlier.
However, earnings from continuing operations dipped to $1.47 per share from $1.48, weighed down by weak titanium dioxide sales.
"(Titanium dioxide) has declined and it's a much smaller factor now," said John Roberts, who leads U.S. chemical coverage at UBS Investment Research.
Excluding one-time items, DuPont earned $1.56 per share. Analysts on average had estimated $1.52 per share.
Net sales rose marginally to $10.4 billion on higher prices for seeds and crop-protection products and demand in North America and Latin America.
DuPont also increased its quarterly cash dividend by 5 percent, or 2 cents, to 45 cents per share.
(Editing by Sriraj Kalluvila, Rodney Joyce and Robin Paxton)