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DuPont Posts Profit Gain, Sees Strong 2010

Wednesday, January 27, 2010

DuPont Co. Inc. reported fourth-quarter 2009 net income of $441 million, a swing from a loss of $629 million for the fourth quarter of 2008. Sales for the quarter rose 10%, to $6.4 billion.

Excluding exceptional items, net income for the quarter was $402 million, compared to a loss of $249 million for the fourth quarter of 2008. The improved earnings were the result of significantly higher sales volumes, lower costs, and favorable currency translations, the company said.

Fourth-quarter sales rose more than 20% for titanium dioxide, electronic materials, performance polymers, and seed products, the company said. Also contributing significantly to fourth-quarter results were overall sales-volume increases in all regions, with sales in Asia-Pacific posting a volume gain of 34%, exceeding pre-recession levels. Demand strength was noted for China, Japan, Korea, and India.

Other factors in the improved fourth-quarter results were lower energy, raw-material, and transportation costs, and cost-reduction and productivity actions totaling $1 billion.

For 2009 as a whole, the company reported net income of $1.77 billion, a 12% decline from 2008. Revenue fell 14%, to $27.3 billion.

In comments on the outlook for 2010, the company boosted its earnings forecast to a range of $2.15 to $2.45 per share from a previous forecast of $2.10 to $2.40 per share.

Business-segment details

For the company’s Performance Coatings segment, fourth-quarter operating income was $78 million, compared to a fourth-quarter 2008 operating loss of $290 million. Performance Coatings sales rose 8%, to $975 million, with the sales increase primarily attributed to higher selling prices. Sales volumes declined 2%, reflecting ongoing industrial-market weakness in developed regions, partially offset by stronger demand in automotive OEM markets. Operating income also benefited from lower raw-material costs and fixed-cost reductions.

For the company’s Performance Chemicals segment, fourth-quarter operating income was $217 million, up sharply from a loss of $36 million in the fourth quarter of 2008. Sales for the segment rose 9%, to $1.3 billion. Sales volume gains were driven primarily by recovery in the titanium-dioxide market in all regions, the company said.

For the Performance Coatings segment, 2009 pretax operating income was $287 million, more than double the 2008 figure of $128 million. Sales for the segment fell 21.4%, to $3.429 billion.

For the Performance Chemicals segment, 2009 pretax operating income was $547 million, a decline of 20.4% from 2008. Sales for the segment fell 18%, to $4.964 billion.

Commenting on the outlook for 2010, Chairman and CEO Ellen Kullman said the company “will continue the momentum generated from last year’s aggressive cost-cutting and cash-generating actions.” She said the company’s bullish outlook for the year is based on “improving economic conditions coupled with well-positioned and streamlined businesses.”

The company said it remains committed to a 20% compound earnings growth goal for the 2009-2012 time period. For 2010, the company boosted its earnings forecast to a range of $2.15 to $2.45 per share from a previous forecast of $2.10 to $2.40 per share.