US DuPont’s Q1 net income down 28% on lower sales

(updates with operational income and segment performance from paragraph seven onwards)

LONDON (ICIS)–DuPont’s first-quarter net income fell by 28% year on year as negative currency effects and portfolio changes impacted sales, the US-headquartered producer said on Tuesday.

Sales revenue decreased by 9% to $9.17bn, while net income fell to $1.04bn from $1.45bn in the same period of 2014.

Despite the weaker performance, DuPont said it had delivered volume growth and operating margin improvement in Performance Materials, Safety & Protection, Nutrition & Health, and Industrial Biosciences divisions.

The producer also said it introduced more than 600 new products in the first quarter, a 5% increase from the prior year.

“DuPont delivered volume and margin improvements in the majority of our post-spin segments through intense focus on innovation, disciplined execution and ongoing efficiency improvements and cost reduction, even in the midst of challenging currency and market environments,” said DuPont chair and CEO Ellen Kullman.

“We expect performance in the remainder of the year to build on this momentum, driven by new product sales and benefits from our accelerated operational redesign, Kullman added.

The group’s total segment operating earnings during the quarter fell 14% year on year to $1.94bn. DuPont’s first-quarter 2015 operating earnings per share was $1.34, compared to $1.58 per share in the prior year quarter.

By segment, DuPont’s Agriculture business reported operating earnings of $1.14bn in the first quarter, down $303m year on year on the back of a negative impact of currency, “decreased volumes from expected reduction in global corn planted area, lower insecticide demand in Latin America and timing of seed shipments”.

In Electronics & Communications, operating earnings increased $10m to $85m, while Industrial Biosciences saw operating earnings remain steady at $56m.

The group’s Nutrition & Health segment reported operating earnings of $89m, down 4%, while in Performance Chemicals, operating earnings of $129m decreased 37% year on year compared with the 2014 first quarter, “driven by lower prices and volumes for titanium dioxide, and the negative impact of currency”.

In Performance Materials, operating earnings rose 12% to $327m, driven by volume growth for ethylene and improved product mix, while in Safety & Protection, operating earnings increased $9m to $184m, the company said.

Looking ahead, DuPont said “given the continued strengthening of the US dollar relative to an average basket of exchange rates for our business for the week beginning 13 April, the company now estimates an approximately $0.80 per share negative currency impact in 2015, up from the $0.60 per share the company estimated on 23 January”.

“The company also now anticipates that the operational redesign will deliver savings of approximately $0.40 per share in 2015. As a result, the company expects to be at the low end of its previously communicated outlook range of $4.00-$4.20 operating earnings per share for 2015, including the full year outlook for the Performance Chemicals segment,” it added.