July 23, 2008 

DuPont earnings rise on global agriculture boom


DuPont Co., one of the largest US chemical companies, posted higher-than-expected earnings Tuesday (July 22), as strong sales performance in its agriculture business helped offset weakness in domestic housing and automotive markets.


DuPont's earnings of US$1.11 a share was above Wall Street's expectations of US$1.07.


Net income in Q2 increased US$108 million to US$1.08 billion, from US$972 million last year. Meanwhile, revenue rose 12.2 percent to US$8.84 billion. Analysts had forecasted revenue of $8.43 billion, according to Reuters Estimates.


DuPont's agricultural business posted an 18-percent increase in pre-tax operating income, driven by higher volumes and commodity prices, US$52 million from soy contracts, and an 18-percent sales growth in overseas markets.


Furthermore, higher selling prices, a weak US dollar and growth in emerging markets led to revenue increase in all other key segments.


However, the company suffered from the domestic housing slump, as its products are used in construction. Weak automotive markets due to rising energy costs have also hurt DuPont, a major supplier of paints to the industry.


The Delaware-based company expects H2 earnings per share to be lower than a year before due to higher energy and ingredient costs, lower demand in certain developed markets, lower income from asset sales, and a higher tax rate.


Meanwhile, DuPont increased the lower end of its full-year earnings outlook to US$3.45 per share from US$3.40, while keeping the high end at US$3.55.


Shares of DuPont fell about 10 percent over the last three months, while the Standard & Poor's Chemical Index is down by about 2.6 percent.

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