DuPont reports 4Q earnings; full-year EPS

DuPont reported fourth quarter 2010 earnings per share of USD 0.40, compared to USD 0.48 in the prior year despite a USD 0.14 per share Pharmaceuticals decline. Excluding significant items, earnings p…

DuPont reported fourth quarter 2010 earnings per share of USD 0.40, compared to USD 0.48 in the prior year despite a USD 0.14 per share Pharmaceuticals decline. Excluding significant items, earnings per share were USD 0.50 versus USD 0.44 in the prior year. Sales were USD 7.4 billion, up 15% versus prior year driven by 12% higher volume and 6% higher local prices, partly offset by 2% impact from currency and a 1% reduction from portfolio changes. Developing market sales increased 24%. Growth in sales was broad based across segments and regions, with particularly strong growth in Electronics & Communications and Performance Chemicals. With regards to the full year, 2010 earnings were USD 3.28 per share versus USD 1.92 in 2009. Excluding significant items, 2010 earnings were USD 3.28 per share versus USD 2.03 in 2009, up 62%. Sales increased 21% to USD 31.5 billion with sales volume approaching pre-recession levels driven by significant economic recovery in developed markets, share gains, and continued penetration of developing markets. Full-year free cash flow was USD 3.1 billion versus the company“s target of greater than USD 1.7 billion, primarily driven by higher earnings and working capital productivity. DuPont exceeded its full-year productivity targets of USD 400 million each for fixed costs and working capital. DuPont increased its full-year 2011 earnings guidance to a range of USD 3.45 to USD 3.75 per share. Previous guidance was USD 3.30 to USD 3.60 per share. Additionally, the impact of the planned Danisco acquisition could reduce 2011 earnings by USD 0.30-USD 0.45 per share on a reported basis. The fourth quarter was a strong finish to an outstanding year. We laid the groundwork for recovery in 2009 and executed with precision and effectiveness in 2010, meeting and often exceeding our business goals and financial commitments, some a full year early, said DuPont Chair and CEO Ellen Kullman. We continue to differentiate DuPont through sustainable growth, disciplined execution and ongoing productivity coupled with science-powered innovation to address population megatrends around food, energy and protection. Fourth quarter 2010 consolidated net sales of USD 7.4 billion were 15% higher than the prior year reflecting 12% higher volume, 6% higher local selling prices, a 2% reduction from currency exchange rates and a 1% reduction from portfolio changes. Fourth quarter 2010 net income attributable to DuPont was USD 376 million versus USD 441 million in 2009. Excluding significant items in both years, fourth quarter 2010 net income attributable to DuPont was USD 463 million versus USD 402 million in 2009. Pharmaceuticals pre-tax income declined USD 160 million versus fourth quarter 2009 due to patent expirations. Fixed costs were 47% of sales, improving from 50% in fourth quarter 2009. Fixed cost productivity exceeded the USD 400 million improvement target set for the full year. Segment pre-tax operating income (PTOI) for fourth quarter 2010 was USD 641 million compared to fourth quarter 2009 PTOI of USD 798 million. Excluding significant items, PTOI for fourth quarter 2010 was USD 657 million compared to USD 743 million in the fourth quarter 2009. The decrease in PTOI principally reflects lower Pharmaceuticals income partly offset by higher segment sales. Consolidated net sales were USD 31.5 billion, up 21% versus prior year driven by 17% higher volume and 5% higher local prices, partly offset by a 1% reduction from portfolio changes. Developing market sales increased 27%. The following is a summary of business results for each of the company“s reportable segments, comparing fourth quarter 2010 with fourth quarter 2009, for sales and PTOI excluding significant items. All references to selling price are on a US dollar basis, including the impact of currency. Agriculture & Nutrition Fourth quarter 2010 sales of USD 1.5 billion were up 13%, reflecting higher volume. Increased sales primarily reflect a strong start to the North American season, an increase in Latin America corn sales, an increase in Brazil soybean volume, and higher sales for crop protection products across all regions, led by continued expansion of Rynaxypyr insecticide. PTOI for the fourth quarter was a seasonal loss of USD 117 million compared to a loss of USD 97 million in the fourth quarter 2009, reflecting continued growth investments. Electronics & Communications Fourth quarter 2010 sales of USD 0.8 billion were up 33%, reflecting 24% higher volume and 9% higher selling prices, primarily pass-through of metals prices. Higher volume was driven by growth in all regions, particularly in Asia Pacific, and strong demand across most market segments, especially photovoltaics. PTOI of USD 98 million was up USD 37 million reflecting substantially higher volume. Performance Chemicals Fourth quarter 2010 sales of USD 1.7 billion were up 26%, principally reflecting 13% higher volume and 14% higher selling prices. Sales increased across all regions, especially in North America and Asia Pacific. Higher selling prices primarily reflect favourable pricing for titanium dioxide. PTOI was USD 315 million, an improvement of USD 107 million reflecting higher selling prices and volume. Performance Coatings Fourth quarter 2010 sales of USD 1.0 billion were up 3%, reflecting 4% higher volume, while selling prices declined 1% due to unfavourable currency impacts. Results reflect continued strengthening in industrial coatings, particularly the North American and European heavy-duty truck markets, and modest growth in global automotive markets, most significantly in North America. PTOI was USD 71 million, essentially flat versus prior year. Performance Materials Fourth quarter 2010 sales of USD 1.6 billion were up 11%, with 9% higher volume and a 5% increase in selling prices, partly offset by a 3% portfolio change. The higher volume reflects double-digit growth in Asia Pacific and North America. PTOI was USD 206 million, an improvement of USD 32 million, resulting from a USD 31 million combined benefit from an acquisition and an early termination of a supply agreement. The impact of higher volume was offset by a weaker overall sales mix and increased raw material costs. Safety & Protection Fourth quarter 2010 sales of USD 0.9 billion were up 13% from higher volume. Growth reflects increased demand for aramid and nonwoven products due to the continued recovery in industrial markets and strong demand across all regions. PTOI was USD 92 million versus USD 135 million in the prior year. The year-over-year reduction was due to higher raw material costs, higher spending for aramids growth initiatives and a net USD 11 million charge related to an asset impairment and a separate gain on an asset sale. The company revised its full-year 2011 earnings outlook to a range of USD 3.45 to USD 3.75 per share. Previous guidance was USD 3.30 to USD 3.60 per share. This revision reflects a lower base tax rate of 20 to 21% and reduced pension expense headwind, partly offset by anticipated dilution from increased shares outstanding. The earnings outlook reflects the expectation for continued steady global economic growth with increasing industrial production, favourable North American agricultural conditions, and the company“s further penetration of developing markets. As previously announced, earnings from Pharmaceuticals are expected to decline about USD 280 million pre-tax versus 2010.