- By Region
DuPont, one of the world’s biggest chemicals companies, reported quarterly profits ahead of Wall Street expectations as higher pricing and strong performance by its agricultural division offset a fall in sales volumes across the company.
The results underlined the strength of the global agricultural economy, while reinforcing doubts about the industrial sector, given slowing growth in Asia and South America, continued turmoil in Europe and an uncertain recovery in the US.
DuPont’s agriculture unit, the biggest contributor to its earnings, includes Pioneer, a maker of genetically modified seeds. The company’s other divisions manufacture basic products that go into a broad range of consumer goods, including paint and plastics, as well as producing well-known brands such as Kevlar, Teflon and Corian.
DuPont made a net income of $1.49bn, or $1.57 per share, in the first quarter, up from $1.43bn, or $1.52 per share, in the same period a year earlier. Excluding extraordinary items, the company earned profits of $1.61 a share, above analysts’ consensus forecasts of about $1.55 per share.
The company’s net sales volume dropped by 2 per cent from the prior year, but an 8 per cent increase in prices and a more favourable product mix helped DuPont record a 12 per cent increase in net sales revenues to $11.2bn, in line with Wall Street expectations.
While much of the increased revenues reflect higher prices on existing products to pass on rising raw materials costs, Ellen Kullman, chief executive, stressed that the higher revenues also came from product launches. “We had excellent price performance in the quarter, driven in part by new product introductions, which were up more than 50 per cent versus [the] prior year,” Ms Kullman noted.
Agricultural sales rose 16 per cent from last year to $4.1bn on an 8 per cent rise in sales volumes. An early spring in the northern hemisphere produced strong corn seed sales in North America and Europe, while the company also experienced strong demand from growers in Brazil.
However, sales volume was down in most other divisions. The volume of sales slumped by 18 per cent in DuPont’s electronics unit, 10 per cent in both performance chemicals and performance materials, and 5 per cent in nutrition and safety. Nevertheless, price increases helped performance materials and performance chemicals to record a 6 per cent increase in revenues.
Although sales contracted by 2 per cent in Asia compared with the same period last year, DuPont said the fastest pace of growth in developing markets was in the Middle East, where revenues rose by 30 per cent from last year, and Latin America, where revenues were 23 per cent higher than last year.
DuPont shares were trading 1.1 per cent lower at $52.71 by late morning in New York.