* 4th-quarter adj earnings per share $0.59 vs est $0.55
* Agriculture unit posts operating profit
* Announces $5 bln share buyback program
* Shares down 0.7 percent
By Swetha Gopinath and Garima Goel
Jan 28 DuPont's quarterly profit doubled,
beating market estimates, as its strong push into agriculture
paid off, and the chemical maker said it would buy back $5
billion in stock.
Strong insecticide sales in Latin America and the earlier-
than-usual shipment of seeds to farmers in Brazil and North
America helped the company's agriculture unit buck seasonal
weakness and post its first profitable fourth quarter in four
DuPont's decision to repurchase shares come amid increasing
investor pressure at chemical companies to increase shareholder
value by divesting volatile businesses.
Activist investor Daniel Loeb is urging rival Dow Chemical
Co to spin off its petrochemical unit and focus on
DuPont outlined plans in October to spin off its performance
chemicals unit, which has weighed on results since 2012, after
Nelson Peltz's Trian Fund Management took a stake in the
Peltz has said shares of DuPont, the largest U.S. chemical
maker by market capitalization, are undervalued but has not set
out any plans for the company.
"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 expects to repurchase $2 billion of its shares this
Shares of DuPont, a Dow Industrial Average component,
were down less than a percent at $59.92 in late morning trading
MORE SPIN OFFS?
Part of DuPont's strategy to concentrate on growing its
high-margin agriculture business includes spinning off the
performance chemicals unit.
Hiving off the unit, which makes materials used in non-stick
cookware, refrigerants and a white pigment used in toothpastes
sunscreens, would shield the rest of the company from volatile
But Wall Street analysts and investors also want DuPont to
spin off its agriculture, food and nutrition businesses into a
"I think the management is committed to shareholder friendly
acts ... We would think there is more to come, but they may not
come as fast as some people want," said Jack Murphy, a portfolio
manager at hedge fund Levin Capital Strategies that owns
DuPont could look at hiving off other businesses such as its
electronics and communications unit, said Stephen Hoedt, senior
equity research analyst with Key Private Bank.
"(The unit) has been a bit more commoditized in recent
quarters and they want to keep their focus on specialty
chemicals ... so that's one that could come up for discussion,"
Fourth-quarter 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.
The biggest rise was at DuPont's agriculture business, which
is benefiting from rising demand for fertilizers, seeds and
pesticides caused by an expanding global population,
particularly in Asia.
The unit, which is newer than DuPont's other six businesses,
was the company's biggest by sales in the fourth quarter.
Operating profit was $88 million, compared with a loss of $77
million a year earlier, as seeds typically shipped in the first
quarter were sold in the fourth quarter.
Because of the timing of the shipments, the company now
expects first-quarter sales and margins in the unit to be
DuPont said 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
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.
DuPont expects 2014 earnings to rise substantially only in
its small industrial biosciences business, with earnings at all
units expected to be flat or up "moderately", according to a
presentation on the company's website.
"Even with the new share repurchase activity, the guidance
for 2014 is still only in line with expectations," said John
Roberts, who leads U.S. chemical coverage at UBS Investment
Net income attributable to DuPont rose to $185 million, or
20 cents per share, in the fourth quarter ended Dec. 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.