DuPont Q1 Profit Falls, Sees Full Year EPS At Low End Of Outlook Due To Currency

(RTTNews) - Chemicals giant EI DuPont De Nemours & Co. (DD) or DuPont Co. Tuesday said first-quarter profit declined from the previous year, as revenues dropped amid adverse currency and decreased volumes. The company now expects higher-than-previously estimated negative currency impact in 2015, and as a result sees full year earnings at the low end of its prior outlook.

Ellen Kullman, DuPont Chair and CEO, said, "DuPont delivered volume and margin improvements in the majority of our post-spin segments through intense focus on innovation, disciplined execution and ongoing efficiency improvements and cost reduction, even in the midst of challenging currency and market environments. We expect performance in the remainder of the year to build on this momentum, driven by new product sales and benefits from our accelerated operational redesign.

Attributable net income dropped to $1.03 billion or $1.13 per share from $1.44 billion or $1.54 per share reported in the prior year.

Including a $0.25 per share negative currency impact, operating earnings were $1.34 per share, while it totaled $1.58 per share in the prior year. On average, 18 analysts polled by Thomson Reuters expected earnings of $1.31 per share for the quarter. Analysts' estimates typically exclude special items.

Cost reductions from operational redesign contributed $0.10 per share to operating earnings. In 2015, total cost savings are expected to increase to around $0.40 per share.

Net sales fell to $9.172 billion from $10.128 billion in the prior year. Analysts expected revenues of $9.41 billion.

The company attributed the sales drop to a 6 percent impact from currency, portfolio changes of 2 percent and expected near-term industry-wide challenges in Agriculture and Performance Chemicals.

Sales declined in the Agriculture business to $3.94 billion from $4.39 billion. Operating earnings decreased 21 percent, as improved product mix in Pioneer, pricing actions taken in parts of Europe and Asia and productivity improvements were more than offset by adverse currency, decreased volumes from expected reduction in global corn planted area, lower insecticide demand in Latin America and timing of seed shipments.

Performance Chemicals generated $1.36 billion in the quarter, compared to $1.59 billion last year. Operating earnings declined 37 percent, driven by lower prices and volumes for titanium dioxide, and the negative impact of currency.

Performance Materials sales fell to $1.411 billion from $1.534 billion. However, operating earnings increased 12 percent, driven by volume growth for ethylene and improved product mix, partially offset by lower ethylene prices and the negative impact of currency.

Further, the board of directors approved a second quarter dividend of 49 cents per share, a 4 percent increase from last quarter. This is the fourth increase since the beginning of 2012. The dividend is payable on June 12, to stockholders of record at the close of business on May 15.

Looking ahead, the company now estimates around $0.80 per share negative currency impact in 2015, up from the $0.60 per share estimated on January 23. The company also anticipates that the operational redesign will deliver savings of $0.40 per share in 2015.

Thus, the company now expects to be at the low end of its previously communicated outlook range of $4.00-$4.20 operating earnings per share for 2015, including the full year outlook for the Performance Chemicals segment. Analysts look for earnings of $4.05 per share for the year.

DD closed up 1.8 percent on Monday at $72.84.