UpdateTi02 pricing weighs on US DuPont Q2 net income

23 July 2013 12:58  [Source: ICIS news]

(updates with division information, 2013 outlook)

LONDON (ICIS)--US chemicals producer DuPont announced on Tuesday that its net income for the second quarter of 2013 was $1.03bn (€783m), down 12% year on year, as “significantly” reduced titanium dioxide (Ti02) pricing offset agriculture sector sales gains.

Net sales were down 1% year on year at $9.84bn as a result of the Ti02 slump, despite an 7% increase in agriculture segment sales. DuPont's total segment operating earnings for the quarter were $1.86bn, down from $2.24bn during the same quarter in 2012.

Sales for the performance chemicals division during the quarter were down 9% year on year at $1.78bn, weighed down by Ti02 prices. The performance chemicals division's operating earnings were $264m, a $330m year on year fall, which the company attributed to Ti02 price declines, despite a 12% increase in sales volumes of the material.

Lower prices for refrigerants and fluoropolymers, along with higher operating costs, also weighed on the performance chemicals division's performance.

The group's performance materials division's operating earnings during the quarter were also down 2% year on year at $336m due to lower selling prices, offset by higher sales volumes.

Nutrition and health segment earnings fell by $44m to $61m in the second quarter due in part to higher guar inventory costs, while agriculture earnings fell by 1% to $941m despite a 7% year-on-year increase in the unit's sales to $3.63bn on the back of higher seed prices.

“Agriculture sales remained strong in the second quarter and titanium dioxide volume improved. As expected, this was largely offset by a substantial decline in performance chemicals earnings from last year’s peak levels,” said DuPont CEO Ellen Kullman.

“We anticipate second half earnings will be significantly better than last year’s  second half. We expect to deliver full-year earnings modestly above 2012 results, overcoming steep declines in the titanium dioxide market and economic headwinds in Europe and parts of Asia,” Kullman added.

Despite the falls, the company continues to predict full-year operating earnings to be about $3.85 per share.

($1 = €0.76)

By: Tom Brown
+44 208 652 3214

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