A spurt of demand for ethanol in the United States, where interest in renewable energy sources is growing, drove up results at the seed business, helping the company beat analysts' estimates.
Also helping results was an 11% sales increase at the company's European, Canadian and Latin American markets, which also benefited from the weak U.S. dollar.
"I was actually pleasantly surprised by coatings and color technologies, where you basically had pricing up 3% and volume up 2%," said HSBC analyst Hassan Ahmed, adding the increase -- mainly overseas -- helped counter weakness in U.S. housing and auto markets.
DuPont's annualized sales to the domestic residential construction and automotive end markets represent about 13% of its consolidated sales.
The company said quarterly net income increased to $945 million or $1.01 a share, from $817 million, or 88 cents a share, a year earlier.
Excluding a charge for an increase in litigation reserves, earnings were $1.07 a share. Analysts on average had forecast $1.04, according to Reuters Estimates.
Net sales rose 6% to $7.85 billion, exceeding the analysts' average estimate of $7.74 billion.
"We continue to improve operating margin and return on capital as we deliver on our growth strategies," Chief Executive Charles Holliday said in a statement.
DuPont, which ranks behind Dow Chemical ,
Ahmed said he was not concerned that the company's outlook was below consensus estimates, since DuPont tends to be extremely cautious in its forecasts.
"This is your classic DuPont conservatism." he said. Shares of DuPont trade at about 15.5 times its expected 2007 earnings, compared with an average multiple of 18.3 for the Standard & Poor's Chemicals Index, which includes the company.
DuPont said it still expected modest volume gains as growth outside the United States and strong agricultural seed markets outweigh lower demand from the U.S. housing and automotive markets.
The company said its outlook for the remainder of the year assumed that energy and ingredient costs would be about the same as in 2006.
DuPont said first-quarter sales from its agricultural and nutrition segment increased 13% to $2.5 billion. Pretax operating income from the segment rose 9% to $651 million.
The company has been trying to regain market share in the domestic corn seed market from Monsanto
The U.S. corn planting season began recently, and the U.S. Department of Agriculture has forecast more than 90 million acres of corn being planted this year -- the most acreage in the nation since World War II.
Corn prices topped $4 per bushel earlier this year, the highest in 10 years. While prices have slipped since, they still remain well above the $2 levels seen in early 2005.
The growth in corn acreage and soaring corn prices are the result of a strong demand for ethanol fuel, which is primarily made from corn in the United States.
Furthermore, steady demand for corn from the food and livestock feed sectors, coupled with fears that unfavorable weather conditions would delay crop plantings, has helped buoy prices for the cereal.
DuPont said sales from its agricultural and nutrition segment would slow in the second quarter after a strong buying pattern in the previous period.