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Industrials

REFILE-WRAPUP 3-Solar, auto and electronics drive DuPont results

(Fixes spelling of interview in editor’s line, DuPont’s throughout, antidote in final sentence)

* DuPont Q3 EPS 40 cents vs. Wall Street forecast 34 cents

* DuPont revenue up 14.8 percent; raises 2010 EPS forecast

* Ashland fiscal Q4 misses expectations

* Celanese Q3 sales, profit widely beat (Rewrites, adds economic data, Celanese CEO interview, updates stock)

By Ernest Scheyder

NEW YORK, Oct 26 (Reuters) - DuPont DD.N, the world's No. 4 chemical maker by revenue, reported a higher-than-expected quarterly profit and raised its 2010 earnings forecast as sales to the solar, auto and electronic sectors surged.

The results reflect improving consumer demand in the United States and Asia, as well as DuPont’s ability to win market share, especially in the agricultural market, analysts said.

“The fact that they’re going out and raising their full-year guidance so late in the year obviously signals that (DuPont Chief Executive Ellen Kullman) is very comfortable,” Alembic Global Advisors analyst Hassan Ahmed said. “It seems as if consumers are beginning to come back.”

DuPont said demand for car paint, electronic parts and genetically modified seeds were all strong in the third quarter, and the only area of weakness in its business was in the construction sector, which uses DuPont’s Tyvek homewrap.

“It’s weak and it’s trending up, but it’s not going to have much of an impact,” Kullman told Reuters about the construction market.

Economic data on Tuesday showed that U.S. home prices fell again in October, though U.S. consumer confidence rose slightly. [nN26139006]

DuPont raised its forecast for 2010 profit per share to $3.10 from $2.90 to $3.05. The average analyst forecast was $3.04, according to Thomson Reuters I/B/E/S.

Third-quarter profit was $367 million, or 40 cents per share, compared with $409 million, or 45 cents per share, a year earlier. Analysts on average expected earnings of 34 cents per share.

Some of DuPont's customers have also reported strong results. For example, Ford Motor Co F.N posted the highest earnings in its history on Tuesday. [ID:nN26109531]

JA Solar Holdings Co JASO.O, a large solar panel maker, said it expects third-quarter shipments to be at least 9 percent higher than its prior outlook.[ID:nSGE69P0HO]

Although DuPont’s results beat expectations, shares of the Wilmington, Delaware-based company fell 1.9 percent to $46.81, after rising about 40 percent so far this year.

Elsewhere in the chemical sector, Celanese CE.N, which has been moving into specialty chemicals like DuPont's, posted a spike in sales and profit that beat expectations. But Ashland Inc's ASH.N earnings missed estimates due to high raw material costs at its water and Valvoline units.

US, ASIA OUTPERFORM EUROPE

DuPont said revenue from the United States, which has typically lagged other regions, rose 17 percent in the third quarter. However, Asian sales remained DuPont’s breadwinner and rose 31 percent, while Europe rose 9 percent.

Volume rose 14 percent, while local selling prices increased 5 percent. Total revenue rose 14.8 percent to $7 billion, above analysts’ expectations of $6.72 billion.

Sales rose in all of DuPont’s six business units. For example, sales in its safety unit, which makes Kevlar bulletproof vests and Nomex, a heat-resistant material popular with firefighters, jumped 30 percent.

DuPont spent aggressively on agricultural research in the quarter, and the loss in that segment widened to $181 million from $113 million. Wall Street had expected the increased spending as DuPont looks to outmaneuver competitor Monsanto MON.N.

Pharmaceutical earnings dropped 58 percent as DuPont's patents on hypertension drugs Cozaar and Hyzaar, developed with Merck MRK.N, expire in phases this year.

SMALLER RIVALS

Ashland, a smaller DuPont rival and owner of the Valvoline oil change brand, posted an adjusted quarterly profit of $1.05 per share for its fourth quarter ended Sept. 30, short of an expected $1.07. [ID:nASA00VXX]

Ashland’s revenue rose 11.7 percent to beat expectations.

Celanese, which makes ingredients for products like paint, cigarette filters and electronics, said its third-quarter sales rose 15.5 percent.

Its adjusted profit beat Wall Street’s expectations by 19 percent, and the company lifted its 2010 earnings expectation. [ID:nBw265590a]

Celanese Chief Executive David Weidman said he expects his company will grow in all regions and operating units in 2011.

And ahead of U.S. fall elections, he called on Washington to settle perceived ambiguity on taxes and other issues.

“There’s no better antidote for a recession than to eliminate uncertainty,” Weidman told Reuters.

For a graphic on DuPont, Celanese and Ashland's earnings click on: r.reuters.com/jas32q (Reporting by Ernest Scheyder; Editing by Derek Caney, Dave Zimmerman)

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