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DuPont profit trounces Street’s outlook; shares rally

DuPont profit trounces Street’s outlook; shares rally
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First Published: Thu, Apr 21 2011. 06 27 PM IST
Updated: Thu, Apr 21 2011. 06 27 PM IST
New York: DuPont’s profit rose 27% to trounce Wall Street’s expectations, fueled by strong sales to farmers and solar panel makers and giving the chemical giant confidence to boost its earnings forecast.
Latin American sales posted the biggest sales percentage jump by region—30%-- and sales to electronics and communications customers rose 29%.
Wall Street cheered the results and bullish forecast, sending DuPont shares up more than 2% in premarket trading as other major stocks rallied on equally positive earnings news.
DuPont, which plans to buy Danish food additives maker Danisco for $5.9 billion, is a Dow Jones industrial average component. Its products, which also include the iconic Kevlar bulletproof vests and Tyvek homewrap, touch nearly every sector, from construction to agriculture and clothing.
Farmers gobbled up DuPont’s genetically modified seeds ahead of the spring planting season, boosting agricultural sales 18%.
DuPont earned $1.43 billion, or $1.52 per share, in the first quarter, up from $1.13 billion, or $1.24 per share, a year earlier.
The results eclipsed the $1.36 per share analysts had been expecting, according to Thomson Reuters I/B/E/S.
Revenue rose 18% to $10 billion. Analysts expected $9.19 billion.
Chief executive officer Ellen Kullman said earnings growth and increased productivity “support our confidence in raising our full-year earnings outlook.”
DuPont lifted its 2011 earnings forecast to a range of $3.65 to $3.85 per share. The Delaware-based company had previously forecast $3.45 to $3.75 per share, and Wall Street expects $3.71.
Danisco
DuPont provided no update on its offer to buy Danisco.
The current tender offer or the Danish company expires at the end of the month, and DuPont has yet to get more than a small fraction of Danisco shareholders to agree to the deal.
DuPont’s offer represented a 25% premium to Danisco’s stock price just before it was announced in January.
If a deal closes, nearly half of DuPont’s revenue will come from food-related businesses. The company expects the acquisition to dent 2011 earnings by 30 cents to 45 cents per share.
China, where Danisco has several assets, approved the deal earlier this month. This was the last regulatory approval needed before shareholders can vote.
DuPont finance chief Nick Fanandakis told Reuters last week that he was “confident” the deal will be approved before the end of April.
If a success, the buyout will define Kullman’s legacy at the company, much the way predecessor’s Charlie Holliday’s acquisition of seed maker Pioneer defined him.
Kullman’s two-year track record at DuPont has thus far been marked by success. Her deft handling of the company’s finances during the recession earned her a 15% base salary raise in 2010 to $1.3 million.
Shares of DuPont were up 2.5% at $56.75 in trading before the market opened. At Wednesday’s close, the stock had jumped 43% in the past 52 weeks.
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First Published: Thu, Apr 21 2011. 06 27 PM IST