DOVER, Del. – The DuPont Co. said Tuesday that its net income more than doubled in the first quarter on a gain from the sale of its performance coatings unit and strong continuing results in its agricultural unit.
CEO Ellen Jamison Kullman said DuPont’s efforts to boost long-term growth are working, despite continued tough economic conditions in Europe and some other markets, pointing to strong demand for the company’s agriculture products both in the U.S. and overseas.
“Growth fundamentals and agriculture markets remain solid and we expect our product lines to perform very well,” Kullman told analysts on a conference call.
As a result, the company expects full-year sales growth in the “low teens” at the agriculture business, she said. Sales rose 14 per cent in that business in the first quarter.
Kullman said the company expects overall market conditions to stabilize around the middle of this year, pointing to the first quarter’s 8 per cent increase in sales volumes over fourth-quarter levels as a sign of improvement. While operating profit for the first half of the year will come in below that of the first half of 2012, the company still expects an increase in earnings for the full year, she said.
DuPont, based in Wilmington, Del., reported net income of $3.35 billion or $3.58 per share for the quarter ended March 31. That’s up from $1.49 billion, or $1.58 per share, a year ago.
Revenue increased 2 per cent to $10.4 billion, matching Wall Street expectations, with 4 per cent volume growth in North American and Latin America. Sales were flat in the Asia-Pacific region and down slightly in Europe, the Middle East and Africa. Overall, global volume was up 2 per cent.
DuPont’s results include net income from discontinued operations after taxes of $1.9 billion, compared to $95 million in last year’s first quarter. The latest results reflect completion of the company’s sale of its performance coatings unit, which produces automotive and industrial paints, for $4.9 billion to The Carlyle Group, a private equity firm.
DuPont also took a one-time pre-tax charge of $35 million to settle claims related to use of its weed killer Imprelis, which has been blamed for damaging evergreen trees.
Excluding one-time items, DuPont reported operating earnings of $1.46 billion, or $1.56 per share, for the quarter compared with $1.5 billion, or $1.64 per share, a year ago.
“The first quarter finished as expected, with the strong agriculture performance and performance chemicals’ decline from peak levels last year,” said Kullman.
Its shares rose $2.08, or 4 per cent, to close at $52.49 Tuesday. They are near the high end of their 52-week trading range of $41.67 to $53.98.
DuPont said sales in its agriculture unit increased 14 per cent in the first quarter to $4.67 billion, as volume grew 8 per cent and prices from new seed and crop protection products increased 6 per cent. Operating earnings totalled a record $1.5 billion, up 13 per cent.
In contrast, the performance chemicals unit saw sales plunge 17 per cent to $1.5 billion, as volumes slid 6 per cent and prices dropped 11 per cent. Operating earnings were down 56 per cent to $251 million. The results reflect substantial price declines in the sluggish market for titanium dioxide, a whitening pigment used in products ranging from toothpaste to paint, and weak demand for fluoropolymers. DuPont said titanium dioxide volume compared to last year’s first quarter but increased 8 per cent compared to the last quarter of 2012.
DuPont reaffirmed its full-year outlook for operating earnings of $3.85 to $4.05 per share, compared to $3.77 per share for 2012.
The company also announced a 5 per cent increase in its quarterly cash dividend to 45 cents from 43 cents for common stock, payable June 12 to stockholders of record May 15.