26 January 2011 21:09 [Source: ICIS news]
By Joseph Chang
DuPont posted underlying fourth-quarter (Q4) earnings per share of $0.50 (€0.37), beating consensus estimates of $0.32. Much of the difference was attributed to a lower tax rate.
The company also boosted its earnings-per-share guidance for 2011 to $3.45-3.75 – up from previous guidance of $3.30-3.60.
BB&T Capital analyst Frank Mitsch noted that volume gains moderated in the fourth quarter after increasing an average of 18% through the third quarter, reflecting tougher year-on-year comparisons.
“However, pricing posted the strongest increase as year-ago [comparisons] eased in Q4, outpacing [raw materials] by $0.06/share. We expect pricing gains to continue in 2011, in part reflecting raw material pass-through,” he said.
Mitsch raised his 2011 earnings-per-share forecast by 15 cents to $3.70, and introduced a 2012 estimate of $4.15.
He also boosted his price target on DuPont’s stock to $56/share, up from $54.
Morgan Stanley analyst Paul Mann raised his 2011 earnings-per-share estimate on DuPont by 21 cents to $3.71, and his 2012 forecast by eight cents to $4.06.
The revisions reflect stronger performance in DuPont’s titanium dioxide (TiO2) business and expected earnings accretion in 2012 from its pending acquisition of Danish food ingredients and enzymes company Danisco.
“DuPont’s performance in 2010 was outstanding, and while it’s cyclical, we estimate 10.2% earnings-per-share growth in 2011, driven by momentum in end markets like [agriculture], electronics, auto, and TiO2,” said Oppenheimer analyst Edward Yang.
He raised his earnings-per-share estimate on DuPont by 11 cents to $3.62.
Jefferies & Co. analyst Laurence Alexander raised his 2011 estimate by 25 cents to $3.70, reflecting favourable pension and tax revisions. His 2012 estimate was lifted by 10 cents to $4.25 because of TiO2 momentum.
Susquehanna International Group analyst Don Carson also said he expects TiO2 earnings to accelerate in 2011.
“We are projecting a 48%, or $515m year-over-year improvement in Performance Chemicals PTOI (pre-tax operating income) due primarily to highly supportive TiO2 fundamentals,” said
“DuPont is the largest global TiO2 producer with a meaningful cost advantage relative to competitors, and we project that the company’s realised TiO2 prices will increase by $0.23/lb in 2011, with $0.20/lb falling to the bottom line as higher ore costs absorb some of the price increase,” he added.
Shares of DuPont rose $1.28, or 2.6%, to close at $50.32/share in Wednesday trading on the New York Stock Exchange.
($1 = €0.73)
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