Chemicals company DuPont on Friday raised its earnings forecast for the first quarter as strong agricultural-products demand is set to outweigh rising costs and the impact from the weak U.S. auto and housing markets.
DuPont said it now expects first-quarter earnings per share of $1.14 to $1.19, up from its Jan. 22 forecast of $1.12 to $1.17.
Surging energy prices, including crude oil's jump to more than $110 a barrel, and the rise in raw-material costs have threatened to squeeze margins across the chemical industry.
But DuPont said strength in its agricultural-products lines and in emerging markets, as well as productivity gains, would boost its earnings.
"These increases more than offset higher ingredient costs, which are expected to rise at nearly twice the rate of 2007, and lower product demand from the U.S. housing and automotive markets," the company said in a statement.
At an investor meeting in New York, executives said they see $1.7 billion in new savings due to productivity improvements. They expect earnings-per-share growth of 10 percent or more, on average, between 2008 and 2010. They peg revenue growth between 7 and 9 percent, helped by a 1 to 2 percent boost form "bolt-on acquisitions."