DuPont profit doubles on agriculture demand; sets $5 billion buyback

Tue Jan 28, 2014 7:00am EST

A view of the Dupont logo on a train car at the Dupont Edge Moor facility near Wilmington, Delaware, April 17, 2012. REUTERS/Tim Shaffer

A view of the Dupont logo on a train car at the Dupont Edge Moor facility near Wilmington, Delaware, April 17, 2012.

Credit: Reuters/Tim Shaffer

(Reuters) - DuPont (DD.N) posted a quarterly profit that doubled and beat market estimates, helped by higher margins at its businesses that sell seeds and make materials for solar panels.

The company, which is the largest U.S. chemical maker by market value, also announced a new $5 billion share buyback program, $2 billion of which it expects to buy back in 2014.

Dupont is concentrating on growing its high-margin agriculture, food, specialty materials, and alternative energy businesses. It has outlined plans to spin off its volatile performance chemicals unit.

Wall Street analysts believe shareholder Nelson Peltz was the reason behind the decision to spin off the business, which makes a popular pigment found in products ranging from car paint to sunscreen.

Peltz, who leads hedge fund Trian Fund Management, has said DuPont's stock is undervalued, but has not disclosed how he seeks to increase value.

DuPont's stock has risen nearly 25 percent in the last year through Monday's close of $60.24, which valued the company at $55.79 billion.

"Our $5 billion share repurchase program reflects ongoing confidence in our plan to continue increasing the value of DuPont for shareholders in 2014 and beyond," Chief Executive Ellen Kullman said on Tuesday.

DuPont's agriculture unit, which supplies farmers with seeds and fertilizers, has grown to become its biggest business by sales.

The unit was profitable in the fourth quarter for the first time in four years, driven by strong insecticide sales in Latin America and earlier seed shipments to Brazilian and North American farmers.

Operating earnings at the business were $88 million, compared with a loss of $77 million last year.

Operating earnings more than doubled at the electronics and communications unit, which makes metal paste used in solar products among other things. The rise was the second highest among DuPont's seven businesses.

DuPont said that it expects full-year operating earnings to rise 8-15 percent to $4.20-$4.45 per share. The company expects 2014 sales to inch up 4 percent to about $37 billion.

Analysts on average expect DuPont to earn $4.31 per share, on revenue of $38.05 billion in 2014, according to Thomson Reuters I/B/E/S.

The company's outlook for the year reflects an expectation for continuing improvement in global industrial production, lower agricultural input costs, and a slightly stronger U.S. dollar, DuPont said in a statement.

Net income attributable to DuPont rose to $185 million, or 20 cents per share, in the fourth quarter ended December 31, from $92 million, or 9 cents per share, a year earlier.

Operating earnings per share were 59 cents per share, ahead of analysts average expectations of 55 cents per share.

Net sales rose 6 percent to $7.75 billion.

(Reporting by Swetha Gopinath and Garima Goel in Bangalore; Editing by Savio D'Souza)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.