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DuPont (DD) 4Q Earnings Drop 71.8 Pct Yet Beat Estimates

 January 22, 2013 08:00 AM

(By Balaseshan) DuPont (NYSE: DD) reported a 71.8% drop in quarterly earnings due to lower income from its Performance Chemicals and Pharmaceuticals segments, higher spending for growth initiatives and adverse currency impact.

Further, the company's results exceeded Street's expectations and it expects modest growth in 2013 operating earnings, sending its shares up 1.94% in premarket.

Earnings from continuing operations for the fourth quarter were $19 million or $0.02 per share, down from $293 million or $0.31 per share last year. Excluding significant items, earnings per share (EPS) from continuing operations fell to $0.11 from $0.26.

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Net sales declined marginally by 0.2% to $7.325 billion, as 3% higher volume was offset by 2% negative currency impact and a 1% reduction from portfolio changes.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.07 per share on revenue of $7.26 billion for the fourth quarter.

The company said volume was driven by Agriculture, with robust sales in Latin America and a strong start to the North American selling season, and increases in Asia Pacific for Performance Materials, Electronics & Communications and Performance Chemicals.

Sales from Agriculture grew 18% on 11% higher volume and 7% higher prices despite the negative impact of currency. Electronics & Communications sales declined 1% as 2% higher volume was offset by 3% lower prices, primarily pass-through of lower metals prices.

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Industrial Biosciences sales rose 4% on 3% higher volume and 1% higher prices, while sales from Nutrition & Health were up 6% on 3% higher volume and 3% higher prices. Performance Chemicals sales were down 15%, with 8% lower volume and 7% lower prices.

Performance Materials sales declined 5%, with 5% lower prices and a 3% reduction from a portfolio change, partly offset by 3% higher volume. Safety & Protection sales were up 2% on 3% higher volume, partly offset by 1% lower prices due to unfavorable currency.

Looking ahead into the fiscal 2013, the company expects EPS from continuing operations of $3.50 to $3.70 and operating EPS of $3.85 to $4.05, an increase of 2% to 7% over last year, while Street predicts $3.84 per share.

On December 13, 2012, DuPont announced the introduction of operating earnings as the basis for reporting results to provide more transparency to the company's operational results and pension costs.

DD closed Friday's regular session up 1.36% at $46.99. The stock has been trading between $41.67 and $57.50 for the past 52 weeks.

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