DuPont Q3 profits down 30% on hurricane damage

21 October 2008 12:24  [Source: ICIS news]

DuPont Chairman, Chad Holliday (Source: DuPont)LONDON (ICIS news)--DuPont on Tuesday posted a 30% drop in third quarter net income at $367m (€275m) compared with $526m in the same period last year, reflecting hurricane damage and the weakening global economy.

 

The US chemicals and life sciences firm also lowered its full year 2008 earnings per share (EPS) outlook – now expecting profits to be flat with 2007.

 

DuPont reported a 9% increase in sales at $7.3bn, with 9% higher selling prices and a 4% currency benefit offsetting a 4% decline in volume.

 

The company said higher selling prices more than offset a 16% increase in raw material, energy and freight prices.

 

“Our businesses performed well in the third quarter despite hurricanes and slower economies around the world, reflecting the strong position of our science-based products in production agriculture, photovoltaics and emerging markets,” DuPont Chairman and CEO Charles Holliday said.

 

DuPont reported third quarter EPS of $0.40, compared with $0.57 in the same period last year.

 

The company recorded a one-time pre-tax charge of $227m, or $0.16 per share, in the third quarter for costs related to the clean-up, restoration of plants and lost inventory resulting from hurricanes.

 

Storm surge caused significant damage at the company’s plant in Orange, Texas with DuPont declaring force majeure for ethylene copolymers and certain other ethylene-based product lines.

 

In addition to the one-time $0.16 per share impact, the company estimates business interruption impacts from the hurricanes at about $0.02 per share in the third quarter and about $0.10 per share for the fourth quarter.

 

DuPont lowered its full year 2008 outlook, based on the hurricane damage and weakening demand in North American and Western European markets, to $3.25-$3.30 per share from $3.45-$3.55 per share.

 

This reduction puts the company's expectations about level with last year’s EPS of $3.28 per share.

 

“Our leadership teams around the world are actively engaged with customers and suppliers, making appropriate and timely adjustments to any changes in demand,” Holliday said.

 

“We enter these challenging times in a better position than any prior economic slowdown. Our cash position, borrowing capability, and balance sheet are strong and we remain intensely focused on our operating cash flows,” he added.

 

All industrial chemicals segments at DuPont reported lower operating profits in the third quarter, with only Pharmaceuticals and Agriculture and Nutrition showing improvements.

 

($1 = €0.75)

 

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By: Mark Watts
+44 20 8652 3214



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