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DuPont profit tops estimates as solar helps electronics unit

October 24/2013
MOSCOW (MRC) -- DuPont Co., the biggest U.S. chemical maker by market value, posted third-quarter profit that beat analysts estimates on higher sales volumes at units that make materials for solar panels and bullet-resistant vests, said Bloomberg.

Profit excluding some legal and pension costs was 45 cents a share, Wilmington, Delaware-based DuPont said today in a statement, topping the 41-cent average of 19 estimates compiled by Bloomberg. Net sales climbed 4.7% to USD7.74 billion, trailing the USD7.77 billion average estimate.

Sales of films and metal pastes used in solar panels drove a 67% gain in operating profit at the electronics unit. Earnings rose 16% at the safety and protection division, where U.S. military demand helped sales of Kevlar anti-ballistic fibers, DuPont said in a slide presentation.

Third-quarter net income rose to USD285 million, or 30 cents a share, from USD5 million, or break even, a year earlier. Items DuPont excluded from its adjusted per-share earnings include some employee-retirement expenses, costs to reimburse customers whose trees were damaged by Imprelis herbicide, and expenses to settle a titanium-dioxide antitrust claim.

DuPont Chairman and Chief Executive Officer Ellen Kullman is under pressure to improve the companys performance from Trian Fund Management LP. The New York-based hedge fund, co-founded by activist Nelson Peltz, raised its stake to more than 21 million shares, or about 2.3%, and met top DuPont executives to discuss ways to boost shareholder value, people familiar with the matter said in August.

Installations by the solar industry may increase 10% this year, DuPont said in its presentation. Sales at the worlds biggest solar-energy companies probably rose 17% in the third quarter, according to the median of analysts estimates compiled by Bloomberg.

The agriculture unit posted the biggest sales gain, rising 15% on Latin American pesticide demand and seed prices, the company said. That helped narrow the loss in the seasonally weak third quarter when farmers in the U.S. and Europe havent begun to buy supplies for the next planting.

The agriculture, safety and electronics units are the kinds of higher-margin businesses that Kullman is focusing on while continuing to move away from commodity chemicals. She said in July that DuPont is considering a spinoff or sale of its performance chemicals unit, which generated USD7.2 billion of revenue last year, because of slow-growing, volatile earnings. The unit makes cyanide, Freon refrigerants, Teflon coating for nonstick pans, and titanium dioxide, known by its chemical formula TiO2 and used in paints and plastics.

The performance chemicals segment posted a 38% decline in third-quarter operating profit as prices fell. The business is starting to recover, with sales volumes rising 25 percent, the third consecutive quarterly improvement, DuPont said.

As MRC wrote previously, in late 2012 DuPont reported of investments that the company were making in all its divisions kept on delivering results which were offset by the weakness in titanium dioxide (TiO2) markets. "Excluding the performance chemicals unit, which includes TiO2, the company expects earnings growth of at least high-teens in 2013 versus 2012. Performance chemicals margins are expected to fall six to seven percentage points in 2013," DuPont said.

DuPont, founded in 1802 to make gunpowder, produces thousands of products from genetically modified seeds to plastics for auto parts.
Author:Anna Larionova
Tags:dioksid titana, min.udobreniya, coating, paints and coatings, DuPont.
Category:General News
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