DuPont says strong Latin American demand for ag products contributed to third-quarter gain

DOVER, Del. – The DuPont Co. said strong demand for agricultural products in Latin America offset weak pricing for a key industrial pigment in contributing to an increase in third-quarter earnings.

The Wilmington chemical company reported net income of $285 million, or 30 cents per share Tuesday, on revenue of $7.8 billion. Removing one-time tax and pension costs, earnings were 45 cents per share, up from 43 cents per share last year and topping the 41 cents Wall Street analysts were expecting, according to a FactSet poll.

For the same period last year, DuPont reported net income of about $5 million, and break even on a per-share basis.

The latest quarter saw sales increase 5 per cent, and overall volume was up 9 per cent, reflecting volume growth in all geographic regions.

DuPont shares rose 71 cents, or 1.2 per cent Tuesday, to close at $60.17, near their 52-week high of $60.86.

Notwithstanding strong performance in agriculture, photovoltaics and personal protection markets, the latest results underscore concerns about DuPont’s performance chemicals unit, whose products include titanium dioxide, or TiO2, a whitening pigment used in a wide range of products, from paint to toothpaste.

DuPont chairwoman and CEO Ellen Kullman said the company is exploring several strategic alternatives for the performance chemicals unit, a commodities business that generates significant cash but also is subject to highly volatile markets. She declined to provide details or a timeline for deciding the future of the unit, which could be sold or spun off.

“We’re looking at a lot of different options,” Kullman said. “We’re operating with a sense of urgency and we want to get this done as soon as we can.”

The performance chemicals unit saw volume increase 12 per cent in the third quarter, but that was not enough to offset steep price declines for titanium dioxide, refrigerants and fluoropolymers, along with higher raw material inventory costs. The unit’s operating earnings fell 38 per cent to $254 million. Third-quarter results also included a one-time pretax charge of $72 million related to DuPont’s settlement of titanium dioxide antitrust litigation.

DuPont’s agriculture unit continued to lead the company’s performance, with volume up 10 per cent and prices improving slightly.

Strong demand for products used in solar energy panels and for personal protection products, such as Kevlar for military body armour, also contributed to DuPont’s improved performance in the third quarter. The electronics and communications unit saw operating earnings jump 67 per cent and volume increase 14 per cent as demand improved in photovoltaic markets, offsetting a 9 per cent decline in pricing. The safety and protection unit saw a 16 per cent increase in operating earnings and a 5 per cent increase in volume, although prices were flat.