The third-largest U.S. chemical maker said its second-quarter profit nearly tripled, offering a positive read on global economic health as many companies have been reporting better-than-expected quarterly profits.
This is as good a quarter as I've seen DuPont report in a long time, said Deutsche Bank analyst David Begleiter. The fact that they're raising guidance ... and noting some signs of recovery, is evidence that there hasn't been a marked slowdown of macroeconomic activity yet.
DuPont said the new 2010 profit forecast reflects its confidence after the second-quarter results.
It now expects 2010 earnings of $2.90 to $3.05 per share, excluding one-time items, up from a previous forecast of $2.50 to $2.70 per share. Analysts expect 2010 earnings of $2.64, according to Thomson Reuters I/B/E/S.
Chief Executive Officer Ellen Kullman, though, said she expects the economic recovery to be more moderate in the second half of 2010.
We continue to hit our productivity and cost-control targets, and remain highly disciplined in creating operating leverage to further grow the company, Kullman said.
REGIONAL & UNIT STRENGTH
Sales in emerging markets jumped 33 percent, with Asia alone up 47 percent. The United States and Europe, which have lagged amid the economic recovery for DuPont, saw sales increase 18 percent and 24 percent, respectively.
The agricultural and nutrition unit, which sells hybrid seeds under the Pioneer brand and is by far the company's breadwinner, saw sales jump 16 percent to $3 billion.
DuPont expects seed sales to be moderately higher in the third and fourth quarters, but said seasonal losses would likely increase.
Pioneer rival Monsanto Co posted a 45 percent drop in fiscal third-quarter income last month, although the factors that affected that company do not appear to have harmed DuPont.
Pioneer has taken advantage of what the marketplace has to offer right now, Deutsche Bank's Begleiter said. They're executing very well.
The performance coatings unit, which makes paint for automobiles and is seen as a growth area for the company, experienced a 15 percent gain in sales.
Executives said their titanium dioxide business, which supplies a key ingredient for paint, continues to strengthen.
The electronics and communications unit, which makes parts for televisions and semiconductors, saw sales rise 53 percent.
And the performance materials unit, which makes packaging materials, reported sales rose 45 percent.
Elsewhere, the company's safety & protection unit, which makes Kevlar bulletproof vests, had a 27 percent jump in sales and volume. Kullman said there was some movement during the second quarter on contracts with the Pentagon to supply Kevlar.
BY THE NUMBERS
For the second quarter that ended June 30, the company said net income rose to $1.17 billion, or $1.26 per share, from $417 million, or 41 cents per share, a year earlier.
Excluding one-time items, the company posted a profit on Tuesday of $1.17 per share.
Analysts expected earnings of 94 cents per share, according to Thomson Reuters I/B/E/S. If was not immediately clear if the numbers were comparable.
Revenue rose 25.6 percent to $8.62 billion. Analysts expected $8.27 billion.
DuPont raised its 2010 earnings forecast to a range of $2.90 to $3.05 per share, excluding one-time items. It had previously forecast $2.50 to $2.70.
Analysts expect 2010 earnings of $2.64 per share.
Total costs rose 14 percent, a marked change from the recession when companies were slashing costs to bolster profit.
Shares of DuPont, a component of the Dow Jones industrial average <.DJI>, rose $1.58, or 4.1 percent, to $40.57 in late morning trading. The stock has held between $29.19 and $41.45 in the past 52 weeks.
(Reporting by Ernest Scheyder; Editing by Maureen Bavdek)