DuPont says early seed sales, strong insecticide demand, cost controls boost 4Q earnings

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DOVER, Del. – DuPont Co. said Tuesday that strong seed and insecticide sales, lower taxes and cost controls helped double its fourth-quarter net income, and the chemicals giant announced plans to buy back $5 billion of its shares to boost shareholder returns.

DuPont’s adjusted earnings beat Wall Street expectations, though revenue fell short. Its shares slipped 1 per cent to close at $59.57 as the broader markets ticked up slightly. The stock is still up 24 per cent in the past 12 months.

DuPont’s agriculture business usually posts a fourth-quarter seasonal loss, but this time benefited from earlier than expected seed sales in Brazil and North America and strong demand for insecticides in Latin America. Profit in the company’s electronics segment jumped on stronger demand for Solamet paste and Tedlar films in photovoltaics used for solar electricity, executives said on a conference call with analysts Monday.

DuPont also pointed to better profitability in its safety and protection business driven by more demand for Kevlar fiber used in body armour and fire-resistant Nomex material. And higher pricing and stronger demand for nutritional items such as probiotics boosted earnings in that division.

Lower prices for titanium dioxide (used for white pigments in paint and cosmetics) and refrigerants, as well as higher raw material costs, weighed on profits in the performance chemicals business. DuPont is in the process of spinning off that segment, which generates significant cash but is subject to highly volatile markets.

DuPont earned $185 million, or 20 cents per share, double the $92 million, or 9 cents per share, that it reported for the final months of 2012.

Its adjusted earnings per share of 59 cents beat the 55-cent estimate of Wall Street analysts surveyed by FactSet. That excludes a pretax $197 million charge to settle claims related to its discontinued Imprelis weedkiller, bringing total Imprelis-related charges to about $1.2 billion, and a pretax $129 million charge for severance and other items.

Sales rose 6 per cent to $7.75 billion from $7.33 billion last year, slightly below the $7.8 billion analysts expected. Volumes rose in all regions, including double-digit gains in Asia and Latin American markets. That offset lower local selling prices and foreign exchange fluctuations.

For the full year, DuPont earned $4.8 billion, or $5.19 per share, on sales of about $35.7 billion, compared with 2012 net income of about $2.8 billion, or $2.91 per share, on sales of about $34.8 billion.

Looking ahead, the Wilmington, Del.-based company forecast full-year 2014 operating earnings of $4.20 to $4.45 per share. Analysts expect $4.33 per share.

The $5 billion share repurchase program replaces an existing program. DuPont expects to repurchase $2 billion of the shares this year.

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