DuPont Delivers Record First Quarter Earnings of $1.61 Ex-items
Innovation and Productivity Drive Strong Performance
WILMINGTON, Del., April 19, 2012 /PRNewswire/ --
"DuPont's market-driven science and commitment to innovation and productivity are winning in key markets, despite economic headwinds early in the first quarter," said DuPont Chair and CEO Ellen Kullman. "Around the world, we are bringing our science closer to local markets by collaborating with customers and partners in our new DuPont Innovation Centers. We are prioritizing our R&D portfolio to deliver food, energy and protection solutions for the world's growing population."
Global Consolidated Sales and Net Income
First quarter 2012 consolidated net sales of $11.2 billion were 12 percent higher than the prior year, including 7 percent attributable to portfolio changes. Local prices were 8 percent higher with increases in all regions. The 2 percent decline in total company volume principally reflects strong Agriculture segment volume gains in all regions offset by lower volume for most segments in Asia. The table below shows regional sales and variances versus the first quarter 2011.
First quarter 2012 net income attributable to DuPont was $1,488 million versus $1,431 million in the first quarter 2011. Excluding significant items, net income attributable to DuPont was $1,520 million versus $1,431 million in the prior year. The improvement principally reflects earnings growth in Agriculture and Performance Chemicals and income from a prior-year acquisition. Higher selling prices more than offset increased spending for sales, marketing and research and development, and higher costs for raw materials, energy and freight.
Earnings Per Share
The table below shows year-over-year earnings per share (EPS) variances for the first quarter.
Business Segment Performance
The table below shows first quarter 2012 segment sales and related variances versus the prior year.
Segment pre-tax operating income (PTOI), excluding significant items, increased 12 percent to $2,377 million, largely driven by higher earnings in Agriculture, Performance Chemicals and acquisition-related improvements in Nutrition & Health and Industrial Biosciences, as shown in the table below.
* See Schedules B and C for listing of significant items and their impact by segment.
The following is a summary of business results for each of the company's reportable segments, comparing first quarter 2012 with first quarter 2011, for sales and PTOI, excluding significant items. References to selling price are on a U.S. dollar basis, including the impact of currency.
Agriculture - Sales of $4.1 billion were up $576 million, or 16 percent, with 8 percent price and 8 percent volume gains. Seed sales growth reflects strong global performance with robust North American corn sales, a strong, early start to the European season and commercial success in Brazil's Safrinha season. Crop Protection product sales growth was underpinned by particular strength in insect control product volumes and price gains across the portfolio. PTOI of $1.3 billion improved 18 percent on higher volume and price, offset in part by input cost increases and unfavorable currency impact.
Electronics & Communications - Sales of $677 million were down 17 percent on 18 percent lower volume. Sales reflect continued soft demand in photovoltaics, partially offset by increased demand for smart phones and tablets. PTOI of $33 million declined from lower volume and plant utilization.
Industrial Biosciences - Sales of $288 million and PTOI of $41 million reflect the acquisition of Danisco's enzyme business. PTOI includes $5 million of amortization expense associated with the fair value step-up of acquired intangible assets.
Nutrition & Health - Sales of $808 million and PTOI of $83 million reflect the acquisition of Danisco's specialty food ingredients business. PTOI includes $21 million of amortization expense associated with the fair value step-up of acquired intangible assets.
Performance Chemicals - Sales of $1.9 billion were up 6 percent, with 16 percent higher selling prices and 10 percent lower volume. Higher selling prices more than offset higher raw material costs. Lower volume reflects continued softness in titanium dioxide, particularly in Asia Pacific. Global demand for titanium dioxide increased sequentially. PTOI of $512 million increased $118 million on higher selling prices.
Performance Coatings - Sales of $1.1 billion were up 6 percent on higher selling prices. Higher selling prices across all regions and market segments offset higher raw material costs. Continued strong demand in OEM motor vehicle and industrial coatings, particularly in the North American heavy duty truck market, was offset by softening in refinish primarily in southern Europe. PTOI of $87 million increased on higher selling prices, mix enrichment and continued productivity actions.
Performance Materials - Sales of $1.6 billion were down 6 percent, with 10 percent lower volume and a 2 percent reduction from a portfolio change partially offset by 6 percent higher selling prices. Demand improved in the automotive market, particularly in North America, but was more than offset by continued softness in industrial and electronics markets. Higher selling prices offset higher raw material costs. PTOI of $240 million decreased due to lower volume.
Safety & Protection - Sales of $941 million were down 2 percent, with 5 percent lower volume, partially offset by 3 percent higher selling prices. Volume was lower on continued softness in industrial markets. Higher selling prices reflect value-based pricing. PTOI of $100 million decreased on lower volume and higher spending for growth initiatives.
Additional information is available on the DuPont Investor Center website at www.dupont.com.
DuPont reaffirms its full-year 2012 earnings outlook of $4.20 to $4.40 per share, an increase of 7 to 12 percent versus 2011, excluding significant items.
Use of Non-GAAP Measures
Management believes that certain non-GAAP measurements are meaningful to investors because they provide insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules C and D.
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.
Forward-Looking Statements: This news release contains forward-looking statements which may be identified by their use of words like "plans," "expects," "will," "anticipates," "believes," "intends," "estimates" or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company's intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
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