January 27, 2012

DuPont's Q4 performance up on Danisco's acquisition

The US$7.1 billion acquisition of Danisco A/S in June 2011 has helped boost Dupont's 2011 fourth quarter performance as it shifts from being a chemical producer into "a science company focused on meeting global demand for food, energy and safety."

DuPont's nutrition unit, now the world's biggest producer of food additives, added US$34 million to pre tax operating income.

Overall, fourth quarter 2011 earnings were US$0.35 per share, excluding significant items, reflecting a US$0.23 per share over-year headwind from a higher tax rate. Prior year earnings were US$0.50 per share, excluding significant items. Reported fourth quarter 2011 earnings were US$0.40 per share, unchanged from the prior year.

Sales grew 14% to US$8.4 billion, principally from 14% higher local prices. A

10% net increase from portfolio changes was offset by a 10% volume decline. Agriculture delivered an 8% sales gain in the fourth quarter and 23% sales growth for the second half. This reflects strong performance during the Latin American selling season.

Excluding significant items and Pharmaceuticals, segment pre-tax operating income increased over US$100 million, or 18% versus the prior year, principally due to Performance Chemicals and acquisitions in Industrial Biosciences and Nutrition & Health.

"We delivered exceptional full-year results in 2011 despite significant market headwinds late in the year," said DuPont Chair and CEO Ellen Kullman. "Our market-driven science continues to meet customer needs in food, energy and protection. Acquisitions in Nutrition & Health and Industrial Biosciences, coupled with robust and disciplined productivity efforts across our businesses, contributed to our successful performance. We remain well-positioned to serve customers and innovate as key markets rebound and global population growth drives new opportunities."
 

Fourth quarter 2011 consolidated net sales of US$8.4 billion were 14% higher than the prior year. Volume declines in all regions were driven by destocking in photovoltaics, polymer and industrial supply chains, as well as weaker demand for products supplying consumer electronics and construction. Agriculture volume increased and primarily reflects growth and penetration in the Latin American summer season. The table below shows regional sales and variances versus the fourth quarter 2010.

Fourth quarter 2011 net income attributable to DuPont was US$373 million versus US$376 million in the fourth quarter 2010. Excluding significant items, net income attributable to DuPont was US$325 million versus US$463 million in the prior year. The decrease principally reflects a higher tax rate. Higher selling prices more than offset increased spending for selling, marketing and research and development, higher costs for raw materials, energy and freight, and lower volume.

Segment pre-tax operating income (PTOI), excluding significant items, increased 16% to US$763 million largely driven by improvements in Performance Chemicals and Agriculture, and acquisitions in Nutrition & Health (i.e. Danisco) and Industrial Biosciences.

DuPont has reaffirmed its full-year 2012 earnings outlook of US$4.20 to US$4.40 per share, an increase of 7-12% versus 2011, excluding significant items.