DuPont Q1 led by electronics, performance materials - CEO

27 April 2010 17:09  [Source: ICIS news]

TORONTO (ICIS news)--DuPont’s electronics and its performance materials businesses led the company's 19% first-quarter sales volume growth, with net income more than doubling to $1.14bn (€855m), chief executive Ellen Kullman said on Tuesday.

Also helping were cost reductions actions and strong growth in Asia-Pacific where sales volume rose 65% year over year, Kullman said in briefing analysts on the first quarter.

Performance chemicals and performance coatings also registered strong year-over-year volume growth.

However, demand increases in many of DuPont’s polymer and chemicals businesses were magnified by the comparison with a particularly weak 2009 first quarter, Kullman said.

DuPont’s electronics and communications segment reported sales of $631m, up 73% from the 2009 first quarter, on a 60% volume increase and a 13% increase in selling prices. Segment operating profit was $105m, compared with an operating loss of $34m in the year-earlier quarter.

The segment’s performance was driven by surging global demand in photovoltaics. Photovoltaics demand was driven by government measures, as well as advance buying ahead of an expected reduction in Germany's subsidies for the sector, among other factors, she said.

Based on strong photovoltaics demand trends, DuPont now expected its market sales to exceed $1bn by 2011 – one year earlier than originally anticipated, Kullman said.

In performance materials, sales grew 63% to $1.5bn as volumes rose 56% and selling prices rose 7%. Key drivers were improved automotive, industrial, consumer and electronic markets. Operating profit was $230m, compared with an operating loss of $146m in the 2009 first quarter.

DuPont’s performance coatings had sales of $902m, up 23% from the 2009 first quarter, driven by a 17% volumes increase and a 6% increase in selling prices. Operating profit was $45m, compared with an operating loss of $75m in the year-earlier quarter.

The segment benefited from strong demand in the automotive sector, with vehicle production up nearly 40% in the first quarter from a very weak 2009 first quarter, Kullman said.

Performance chemicals sales rose 32% to $1.4bn on a 30% increase in volumes and a 3% increase in selling prices. Operating profit was $190m, compared with an operating profit of $44m in the 2009 first quarter.

The segment’s sales increase was primarily driven by strong continued recovery in titanium dioxide and fluoropolymers, as well as demand for refrigerants. 

DuPont's agriculture and nutrition segment reported sales up 6% to $3.2bn on a 1% increase in volumes and a 5% increase in selling prices. Segment operating profit was $941m, up from $852m in the 2009 first quarter. Higher North American seed sales were partially offset by delays in the planting season in Europe, DuPont said.

DuPont also said it increased its full-year earnings guidance to a range of $2.50-2.70 per share from its previous range of $2.15-2.45 per share.  

The improved outlook reflected expected stronger sales growth and improved pre-tax operating margins on the back of continuing global economic expansion, with particularly strong demand in Asia Pacific, it said.

Analysts at New York-based Alembic Global Advisors said they were encouraged by DuPont's 13% volume growth in the US market. With the exception of the 2009 fourth quarter, DuPont's volume growth in the US market had been negative since the 2008 first quarter, the analysts said.

Following DuPont's first-quarter report, Albembic raised its 2010 earnings per share estimate for DuPont to $2.60, from $2.40, it said.

DuPont's shares were off slightly by 42 cents, or 1%, to $40.52 in Tuesday morning trading on the New York Stock Exchange.

($1 = €0.75)

For more on DuPont visit ICIS company intelligence
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By: Stefan Baumgarten
+1 713 525 2653



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