Chemicals maker DuPont's quarterly profit more than doubled as the worst dry spell in decades encouraged US farmers to buy its drought-hardy seeds and crop-protection products to boost yields. Strong wheat, corn and soybean prices also spurred agricultural sales in the Americas, helping DuPont beat estimates for the quarter despite an ongoing decline in demand for its once-lucrative titanium dioxide paint pigment.
The Wilmington, Delaware-based company's shares traded up 0.7 percent at $50.74 before the bell on Tuesday. "The first quarter finished as expected, with the strong agriculture performance and performance chemicals' decline from peak levels last year," DuPont Chief Executive Ellen Kullman said in a statement.
The 210-year-old company, known for its chemicals business, is focusing on food and agriculture products that are less exposed to ebbs and flows in titanium dioxide (Ti02) sales. The shift is evident in the $5 billion sale of its car paint unit last year and the $6 billion purchase of nutritional supplements maker Danisco in 2011. "Ti02 has declined and it's a much smaller factor now. We also think it is bottoming so it's become less of an issue," John Roberts, who leads US chemical coverage at UBS Investment Research, said ahead of the announcement.
He had expected first-quarter earnings of $1.55 per share, above the Wall Street estimates of $1.52 per share. Excluding one-time items, DuPont earned $1.56 per share. The company's net income for the quarter, which included the beginning of the North American spring planting season, jumped to $3.35 billion, or $3.58 per share, in the first quarter, from $1.49 billion, or $1.58 per share, a year earlier. Fourth-quarter earnings from continuing operations dipped to $1.47 from $1.48, a year earlier.
Net sales rose marginally to $10.4 billion on higher prices for seeds and crop protection products and demand in North America and Latin America. Agriculture business was the biggest source of revenue in the fourth quarter, contributing almost 45 percent. The performance chemicals business, which includes titanium dioxide sales, accounted for about 15 percent. Spiralling prices for wheat, corn and soybean have also helped boost sales for rivals Monsanto Co and Syngenta AG DuPont increased its quarterly cash dividend by 5 percent, or two cents, to 45 cents per share.