DuPont Earnings Top Estimates on Strong Agriculture Sales
Chemicals maker DuPont's quarterly profit more than doubled as the worst dry spell in decades encouraged U.S. farmers to buy its drought-hardy seeds and crop-protection products to boost yields.
Strong wheat, corn and soybean prices also spurred agricultural sales in the Americas. That helped DuPont beat estimates for the quarter despite an ongoing decline in demand for its once-lucrative titanium dioxide paint pigment.
After the earnings announcement, the company's shares rose in pre-market trading. (Click here to get the latest quotes for DuPont.)
"The first quarter finished as expected, with the strong agriculture performance and performance chemicals' decline from peak levels last year," DuPont Chief Executive Ellen Kullman said in a statement.
The 210-year-old company, known for its chemicals business, is focusing on food and agriculture products that are less exposed to ebbs and flows in titanium dioxide (Ti02) sales.
"I'd describe (the economy) as I'm cautiously optimistic," Kullman told CNBC. "We see areas of great strength like in agriculture. Strong start to the North American [growing] season. Strong end to the Brazil season, Latin American season. We food, food ingredients, still going well. But on the industrial side, automotive had a slow start to the year."
The shift is evident in the $5 billion sale of its car paint unit last year and the $6 billion purchase of nutritional supplements maker Danisco in 2011.
"Ti02 has declined and it's a much smaller factor now. We also think it is bottoming so it's become less of an issue," John Roberts, who leads U.S. chemical coverage at UBS Investment Research, said ahead of the announcement.
The company's net income for the quarter, which included the beginning of the North American spring planting season, jumped to $3.35 billion, or $3.58 per share, in the first quarter, from $1.49 billion, or $1.58 per share, a year earlier.
Excluding one-time items, the company's earnings were $1.56 per share, down from $1.61 a share in the year-earlier period.
DuPont also reported revenue of $10.5 billion.
Analysts had expected the chemical and bioscience company to report earnings excluding items of $1.52 a share on $10.41 billion in revenue, according to a consensus estimate from Thomson Reuters.
Fourth-quarter earnings from continuing operations dipped to $1.47 from $1.48, a year earlier.
Kullman told CNBC's "Squawk Box" that the company's business performance in China depends on the sector.
"So in nutrition and health food ingredients and agriculture we're making great progress," she said. "Automotive? The builds were up 12 percent year over year. But in other areas that (are) infrastructure related they've been lagging ... We see a lot of indication that that's starting to loosen up and starting improve, but we'd like to see that coming forward a little more firmly."
Agriculture business was the biggest source of revenue in the fourth quarter, contributing almost 45 percent. The performance chemicals business, which includes titanium dioxide sales, accounted for about 15 percent.
DuPont increased its quarterly cash dividend by 5 percent, or two cents, to 45 cents per share.
The company also reaffirmed its 2013 outlook for earnings of $3.85 to $4.05 per share, up from $3.77 per share in the year-earlier period.