DuPont's Earnings Rise on Strong Overseas Growth
Chemical maker DuPont said on Tuesday that third-quarter profit rose more than 8 percent as higher international seed sales offset weakness in the U.S. housing and auto markets.
With expectations that overseas sales growth would continue to outweigh lower demand in the United States, the largest U.S. chemical company by market capitalization slightly raised its full-year earnings outlook.
Quarterly profit increased to $526 million, or 56 cents a share, from $485 million, or 52 cents a share, a year earlier.
Excluding a reserve for litigation, earnings were 59 cents a share. Analysts on average were expecting 53 cents a share, according to Reuters Estimates.
HSBC analyst Hassan Ahmed said a lower-than-anticipated tax rate added about 5 cents a share to earnings, but added that investors are likely to view the results and outlook positively in light of a U.S. slowdown and with weak forecasts from a number of blue-chip companies.
"Basically, despite all the moving parts, this was a strong performance," said Ahmed.
DuPont shares were trading higher in early morning trading.
Sales rose almost 6 percent to $6.68 billion, in line with analysts' estimates.
In July, DuPont said it expected to benefit in the second half of 2007 from growth outside the United States, higher local selling prices and reductions in fixed costs.
Sales from DuPont's agriculture and nutrition unit increased 21 percent, spurred by gains in corn, soybeans and canola seed sales, as well as strong fungicide sales in Latin America and Europe.
DuPont is betting heavily on growing revenue from its agricultural and bio-based products.
This year the Wilmington, Delaware-based company invested about half of its $1.3 billion research and development budget in its agriculture and nutrition segment.
DuPont's coatings and color technologies segment suffered from the slump in the U.S. housing industry and the slowdown in U.S. auto industry. Excluding a year-earlier insurance recovery, the unit's pretax operating income fell 14 percent.
The company raised its full-year earnings forecast to a range of $3.15 to $3.20 per share, excluding items. It had earlier forecast about $3.15, and the analysts' average estimate was $3.16.
In 2008, DuPont expects strong revenue growth in emerging markets and significant earnings growth in its agriculture & nutrition segment.