U.S. chemical maker DuPont
The Wilmington, Delaware-based company makes the building blocks for thousands of every day items, like paint, plastics, and solar panels, and produces trade-marked brands like Kevlar, Teflon and Corian.
Any increase in earnings could indicate growing demand for these and other items, and assuage concerns about a relapse into recession.
Already, there have been positive macroeconomic signs, with auto sales slightly improving in recent months and growing investment in solar and public transportation, growth areas for DuPont.
But there's also some bad news, including double-digit unemployment, weak housing sales and anemic consumer confidence.
DuPont, a component of the Dow Jones industrial average, is one of the world's largest chemical makers, and its earnings will be closely watched by Wall Street as a preview for what peers Dow Chemical and BASF might report in coming weeks.
After an extremely violent/volatile year in 2009, the stage is set in 2010 for chemical investors to see moderately calmer seas and smoother sailing that should result in solid performance and help the group outperform the broader market, Credit Suisse analyst John McNulty said in a recent outlook for the chemical sector.
Analysts expect DuPont to earn 41 cents per share on revenue of $6.16 billion for the fourth quarter, according to Thomson Reuters I/B/E/S estimates.
The company lost 70 cents per share in the fourth quarter of 2008, a bleak period for the entire chemical industry.
Posting a 41-cent profit on Tuesday would be a major swing for DuPont and a boon for Ellen Kullman, who became chief executive in January 2009.
CONCERNS IN THE DETAILS
But investors and analysts will also be asking tough questions of DuPont executives during the company's earnings conference call.
Last week a federal judge ruled that DuPont violated a licensing agreement with Monsanto Co
Yet DuPont, seemingly brushing off the judge's ruling, said it would continue to push forward with a line of seeds that would incorporate Monsanto's technology.
DuPont hopes that by prolonging the matter through a separate suit against Monsanto it will eventually be vindicated.
Elsewhere, DuPont's patent for the heart drug Cozaar and related pharmaceuticals is set to expire this year. Royalties from the drugs are expected to make up about 30 percent of DuPont's 2009 earnings. Kullman, the CEO, has laid out a plan to replace those profits, but Wall Street is nervous about the quick change.
DuPont is also expected to get a boost from favorable currency rates in the fourth quarter. Air Products and Chemicals Inc
If DuPont does report a boost in revenue due in part to currency, it could be seen as a small issue on Wall Street, where investors have become increasing interested in better results from sales, not other forces like cost cuts or foreign exchange.
DuPont will release its quarterly earnings report on Tuesday around 6 a.m. EST, and will hold a conference call with investors at 9 a.m. EST.
(Editing by Steve Orlofsky)