DuPont Q3 net income up 23% year-over-year to US$452M as revenues rise 32% to US$9.2B; CEO says results mostly reflect higher selling prices, currency benefit, partly offset by higher spending for sales, marketing, R&D, raw materials, energy, and freight

WILMINGTON, Delaware , October 25, 2011 (press release) – Highlights:

* Third quarter 2011 earnings were $.69 per share excluding significant items (see Schedule B) versus $.40 per share in the prior year. Reported third quarter 2011 earnings were $.48 per share versus $.40 per share in the prior year.


* Sales increased 32 percent to $9.2 billion with 15 percent higher local prices, 4 percent currency benefit, 1 percent higher volume, and a 12 percent net increase from portfolio changes. Sales in developing markets grew 38 percent.


* Growth in demand for the company's agricultural products and further expansion into food ingredient and enzyme markets offset destocking in photovoltaics and specialty polymers.


* Segment pre-tax operating income excluding significant items increased 50 percent to $1.1 billion, largely driven by improvements in the Performance Chemicals and Agriculture segments and the acquisition of Danisco.


* DuPont is on track to meet its full-year 2011 productivity targets for fixed costs and working capital. Year-to-date fixed cost productivity totals more than $250 million.


* Given the strong performance in the third quarter, the company has raised its expectations for full-year 2011 earnings to a range of $3.97 to $4.05 per share excluding significant items. This moves the range to the upper half of the company's previous guidance of $3.90 to $4.05 per share."The resilience and diversity of DuPont's business portfolio was evident in our strong third quarter results. Despite turbulent global economic and market conditions, we delivered solid growth through innovative products and process technologies, disciplined execution and continued productivity gains," said DuPont Chair and CEO Ellen Kullman. "Our portfolio is further strengthened by the rapid integration of Danisco, continued capacity expansions and selective growth investments across many of our businesses."

Global Consolidated Sales and Net Income

Third quarter 2011 consolidated net sales of $9.2 billion were 32 percent higher than the prior year reflecting 15 percent higher local prices, 4 percent favorable currency effect, 1 percent higher volume and a 12 percent net increase from portfolio changes. The table below shows regional sales and variances versus the third quarter 2010. Third quarter 2011 net income attributable to DuPont was $452 million versus $367 million in the third quarter 2010. Excluding significant items, net income attributable to DuPont increased $288 million, or 78 percent, to $655 million. The increase principally reflects higher selling prices and currency benefit, partly offset by increased spending for selling, marketing and research and development, and increased costs for raw materials, energy, and freight.

The following is a summary of business results for each of the company's reportable segments, comparing third quarter 2011 with third quarter 2010, for sales and PTOI (loss) excluding significant items. References to selling price are on a U.S. dollar basis, including the impact of currency.

Agriculture - Sales of $1.4 billion were up $0.4 billion, or 41 percent, from 26 percent higher volume and 15 percent higher selling prices principally reflecting a strong, early start to the Latin American season. For Pioneer seed, volume and price growth was delivered in both corn and soybeans. Crop Protection sales increased across all regions and market segments, led by continued strong demand for Rynaxypyr® insecticide. PTOI of $(69) million improved from $(191) million due to higher sales, partially offset by growth investments and portfolio changes.

Electronics & Communications - Sales of $841 million were up 20 percent, with 28 percent higher selling prices, primarily metals pass-through, and 8 percent lower volume. Lower volume reflects destocking in photovoltaics, and softness in plasma displays and packaging graphics. PTOI of $99 million decreased $27 million on lower volume.

Industrial Biosciences - Sales of $293 million and PTOI of $34 million reflect the acquisition of Danisco's enzyme business. PTOI includes approximately $4 million of amortization expense associated with the fair value step-up of intangible assets acquired as part of the acquisition.

Nutrition & Health - Sales of $844 million were up $540 million principally due to the acquisition of Danisco's specialty food ingredients business. PTOI of $55 million increased $45 million reflecting the acquisition and includes $22 million of amortization expense associated with the fair value step-up of the acquired intangible assets.

Performance Chemicals - Sales of $2.1 billion were up 28 percent, with 29 percent higher selling prices and 1 percent lower volume. Higher selling prices were driven by strong global demand for titanium dioxide and fluoropolymers and pass-through pricing of higher raw material costs for industrial chemicals. Volume declined in refrigerants and industrial chemicals. PTOI of $593 million increased $301 million due to higher selling prices.

Performance Coatings - Sales of $1.1 billion were up 17 percent, with 13 percent higher selling prices and 4 percent higher volume. Higher selling prices reflect favorable currency and pricing actions across all market segments to offset higher raw material costs. Demand increased for OEM motor vehicle coatings and remained strong for industrial coatings, particularly in the North American heavy-duty truck market. PTOI of $72 million increased $8 million on strong sales performance led by refinish.

Performance Materials - Sales of $1.7 billion were up 11 percent, with 18 percent higher selling prices and 7 percent lower volume. Higher selling prices offset higher raw material costs. Lower volume reflects broad-based channel destocking along with softening in consumer and industrial markets, and production-related supply issues in ethylene-based polymers. PTOI of $231 million decreased $50 million on lower volume.

Safety & Protection - Sales of $1.0 billion were up 15 percent, with 8 percent higher selling prices and a 7 percent increase from the MECS acquisition. Higher selling prices primarily reflect pricing actions to offset raw material cost increases. PTOI of $118 million decreased $16 million on destocking in industrial markets and higher spending for growth initiatives including the Cooper River Kevlar® expansion, which more than offset the impact of the acquisition and favorable currency.

Additional information is available on the DuPont Investor Center website at www.dupont.com.

Outlook

Given the strong performance in the third quarter, the company has raised its expectations for full-year 2011 earnings to a range of $3.97 to $4.05 per share excluding significant items. This moves the range to the upper half of the company's previous guidance of $3.90 to $4.05 per share. Expectations for the fourth quarter include slowing global growth, some destocking, and the recognition that a portion of Agriculture sales in Latin America was shifted to the third quarter by the early start of the planting season.

 

E. I. du Pont de Nemours and Company

Consolidated Income Statements

(Dollars in millions, except per share amounts )

 

SCHEDULE A

                       
     

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 
         

2011

 

2010

 

2011

 

2010

 

Net sales

       

$           9,238

 

$            7,001

 

$         29,536

 

$          24,101

 

Other income, net (a)

       

161

 

66

 

415

 

890

 

Total

       

9,399

 

7,067

 

29,951

 

24,991

 
                         

Cost of goods sold and other operating charges (a)

       

7,107

 

5,443

 

21,129

 

17,223

 

Selling, general and administrative expenses

       

1,014

 

782

 

3,177

 

2,796

 

Research and development expense (a)

       

557

 

409

 

1,418

 

1,178

 

Interest expense

       

116

 

103

 

331

 

309

 

Employee separation / asset related charges, net (a)

       

36

 

-

 

36

 

-

 

Total

       

8,830

 

6,737

 

26,091

 

21,506

 
                         

Income before income taxes

       

569

 

330

 

3,860

 

3,485

 

Provision for (benefit from) income taxes (a)

       

109

 

(39)

 

727

 

811

 
                         

Net income

       

460

 

369

 

3,133

 

2,674

 
                         

Less:  Net income attributable to noncontrolling interests

       

8

 

2

 

32

 

19

 
                         

Net income attributable to DuPont

       

$              452

 

$               367

 

$           3,101

 

$            2,655

 
                         

Basic earnings per share of common stock

       

$             0.48

 

$              0.40

 

$             3.33

 

$              2.92

 
                         

Diluted earnings per share of common stock

       

$             0.48

 

$              0.40

 

$             3.28

 

$              2.89

 
                         

Dividends per share of common stock

       

$             0.41

 

$              0.41

 

$             1.23

 

$              1.23

 
                         

Average number of shares outstanding used in earnings per share (EPS) calculation:

               

 Basic

       

932,356,000

 

908,366,000

 

929,369,000

 

906,991,000

 

 Diluted

       

943,485,000

 

918,500,000

 

942,812,000

 

914,987,000

 
                         
                         

(a) See Schedule B for detail of significant items.

                       
                       

 

 

 

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