DuPont Earnings Muted by Sluggish Economic Growth

Industrials

Published: October 28, 2014 8:35 am

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E.I. du Pont de Nemours and Co. (NYSE: DD) reported its third-quarter results after the market close on Monday as $0.54 in earnings per share and $7.5 billion in revenue. That was against Thomson Reuters consensus estimates of $0.53 in earnings per share and $7.95 billion in revenue. In the third-quarter of the previous year, DuPont had earnings of $0.45 per share and revenue of $7.74 billion.

The company gave guidance for the fourth quarter of a 20% growth in earnings, which would put it in-line with the previous fourth quarter’s earnings of $0.59 per share but below the consensus estimate of $0.70 per share. DuPont’s outlook on the full year falls in the range of $4.00 to $4.10 in earnings per share against a consensus estimate of $4.00.

Net income for the third quarter was $434 million, compared to the same period last year of $288 million.

The sales in only two segments grew in this quarter: Industrial Biosciences and Nutrition & Health. However the highest revenue for a segment came in at Performance Chemicals, which was $1.64 billion.

Across the global segments sales came in as:

U.S. and Canada, $2.41 billion
Europe, Middle East and Africa, $1.74 billion
Asia Pacific, $1.95 billion
Latin America, $1.40 billion

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DuPont Chair and CEO Ellen Kullman said:

In the third quarter, we improved our operating margins in five of seven segments and grew operating earnings per share 20 percent, despite a weaker Ag environment and sluggish economic growth in most of the world. Our increase in margins in a slow growth environment reflects the momentum we are building as we execute our plan, which is driving new products, portfolio enhancements and a broad initiative to redesign our operating model with a smaller cost base and a simplified support structure. We are positioning DuPont for our next stage of growth, while increasing returns to our shareholders.

On October 10, Jefferies upgraded DuPont to a Buy rating from Hold and raised its price target to $84 from $72.

Shares of Du Pont closed Monday down 1.6% at $67.88. Following the earnings report, the initial reaction in the premarket has been positive and shares were up less than 1% at $68.00.

The stock has a consensus analyst price target of $71.88 and a 52-week trading range of $59.35 to $72.92. The market cap is $62 billion.

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