DuPont reports strong first-quarter 2010 EPS; raises full-year guidance

DuPont“s first-quarter 2010 earnings per share were USD 1.24, compared to USD .54 in the prior year.
Asia Pacific sales were USD 1.6 billion with volume up 65% in the quarter. Sales in Performance P…

DuPont“s first-quarter 2010 earnings per share were USD 1.24, compared to USD .54 in the prior year. Asia Pacific sales were USD 1.6 billion with volume up 65% in the quarter. Sales in Performance Polymers, Electronics & Communications, and Titanium Technologies were particularly strong. Volumes in emerging markets were also strong, up 28%. Raw material, energy and freight costs, adjusted for currency and volume, were about 2% lower versus prior year. The company expects these costs to trend higher as the year progresses, reflecting a full-year increase of about 5%. Spending increases for growth initiatives, primarily in Agriculture & Nutrition, along with higher non-cash pension expense, contributed to an increase in total fixed costs compared to 2009. Continued productivity projects and restructuring savings improved fixed costs as a percentage of sales to 37%, which is comparable to pre-recession levels. Pharmaceuticals first-quarter pre-tax income was USD 221 million, about USD 60 million higher than anticipated. The company expects full-year Pharmaceuticals pre-tax income of USD 360-400 million. DuPont increases its full-year 2010 earnings guidance to a range of USD 2.50 to USD 2.70 per share. The previous guidance was USD 2.15 to USD 2.45 per share. Our intense focus on customers, sustained R&D investments and productivity improvements are delivering growth, said DuPont Chair and CEO Ellen Kullman. Macro trends drove first-quarter demand for our science-based innovations, and DuPont was ready. The actions taken last year are benefiting the company as we emerge stronger in 2010. First-quarter 2010 consolidated net sales of USD 8.5 billion were 23% higher than the prior year. This reflects 19% higher volume, 2% higher local selling prices, and a 3% positive impact from currency exchange rates, partly offset by a 1% reduction from portfolio changes. Net income attributable to DuPont for the first quarter 2010 was USD 1,129 million versus USD 488 million in the prior year. The improvement reflects significantly higher sales volume, increased manufacturing capacity utilization, higher selling prices, currency benefit and lower raw material costs, partly offset by fixed cost increases for growth investments and higher non-cash pension expense. The company“s productivity and cost-cutting actions are essentially tracking according to plan. DuPont increased its full-year earnings guidance to a range of USD 2.50-USD 2.70 per share from its previous range of USD 2.15-USD 2.45 per share. The new outlook reflects expected stronger sales growth and improved pre-tax operating margins, supported by continuing global economic expansion with particularly strong demand in Asia Pacific. The company expects free cash flow to be about USD 200 million higher than originally anticipated, and has increased its outlook from greater than USD 1.5 billion to more than USD 1.7 billion.