DuPont Sees Slight 4Q Dip, Record Annual Earnings
DOVER, Del. (AP) — Chemical and plastics maker The DuPont Co. said Tuesday that increases in raw material costs and taxes and a drop in volumes outpaced a 14 percent increase in prices in the fourth quarter and its net income fell.
The company's adjusted earnings topped analysts' expectations, however, and its shares rose 5 cents to $49.40 in afternoon trading.
DuPont reported net quarterly income of $373 million, or 40 cents per share, compared with $376 million, or 40 cents per share, in 2010's fourth quarter. Its revenue rose 14 percent to $8.4 billion. Analysts were expecting revenue of $8.52 billion.
Excluding one-time items, DuPont said it earned 35 cents per share, down from 50 cents per share a year earlier. Analysts on average forecast 33 cents per share, according to FactSet.
Chairwoman and CEO Ellen Kullman said the quarter's volume declines don't reflect macroeconomic conditions. Instead, customers are conserving cash and destocking, she said.
"After a challenging fourth quarter, we anticipate conditions will improve in many of our industrial businesses as (this) year plays out," Kullman said.
For the full year, DuPont earned about $3.5 billion, or $3.68 per share, compared with $3.05 billion, or $3.28 per share, for 2010. Excluding one-time times, per-share earnings rose 20 percent to a record $3.93, while revenue rose 20 percent to $38 billion, slightly below the average analyst estimate for $38.1 billion.
The per-share earnings figure was near the high end of the lowered 2011 earnings forecast DuPont issued last month to reflect weaker demand in electronics and industrial supplies.
Price increases across its business segments plus acquisitions in health and nutrition and industrial biosciences boosted full-year earnings, the company said.
"We delivered exceptional full-year results in 2011 despite significant market headwinds late in the year," Kullman said. "... We remain well-positioned to serve customers and innovate as key markets rebound and global population growth drives new opportunities."
DuPont reaffirmed its prediction for a 12 percent increase in earnings in 2012, to $4.20 to $4.40 per share.
For the fourth quarter, DuPont's volumes fell around the world, led by a 23 percent drop in the Asia-Pacific region. The company said customer destocking in solar panel, polymer and industrial supply chains was a key factor.
Weaker demand for DuPont products used in consumer electronics and construction also dampened the company's fourth-quarter volumes. Its revenue in electronics and communications fell 18 percent as volumes in the unit fell 33 percent.
DuPont's agriculture unit reported the only quarterly volume increase, of 3 percent; revenue in the unit rose 8 percent, with the company attributing the performance to strong sales in Latin America.
DuPont also benefited from last year's acquisition of Danish company Danisco's specialty food ingredients business. Revenue in the nutrition and health unit more than doubled, with sales rising $468 million to $806 million.
Volume in performance chemicals, including titanium dioxide, which is used to whiten products from paint to toothpaste, fell 17 percent. But price increases compensated for the declines and boosted the unit's revenue by 12 percent to $1.9 billion.
Jeff Windau, an analyst with Edward Jones, said he was impressed.
Kullman said the titanium oxide business was "good" even at its depths and "fantastic" at its peaks, and DuPont expects that market to remain strong.
"Customers who historically only purchase on a quarterly basis are now looking for long-term relationships," she noted. "... I think that's an indicator that supply is becoming a predominant issue."
DuPont's agriculture unit led results for the year, with revenue rising 17 percent to $9.2 billion on 10 percent higher volume.
The safety and protection unit posted the second-highest volume gain for the year at 4 percent.