DuPont Q4 Adj. Profit Tops View, But Revenues Miss; Issues Weak 2015 Outlook

(RTTNews) - Chemical giant EI DuPont De Nemours & Co. (DD) or DuPont, reported Tuesday a profit for the fourth quarter that soared from last year, despite a sales decline, reflecting cost reduction initiatives across operations.

Operating earnings per share matched analysts' expectations, while quarterly revenues came shy of their estimates. The company also provided earnings guidance for the full-year 2015, below Street view.

The Wilmington, Delaware-based company reported net income attributable to the company of $668 million or $0.74 per share for the fourth quarter, sharply higher than $183 million or $0.20 per share in the prior-year quarter.

Earnings from continuing operations soared to $0.73 per share from last year's $0.19 per share. Excluding items, operating earnings from continuing operations was $0.71 per share, compared to $0.59 per share in the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share for the quarter. Analysts' estimates typically exclude special items.

The company attributed a 20 percent increase in operating earnings per share to a number of company actions, including strategic portfolio initiatives, continued productivity improvements related to the company's operational redesign, reductions in performance-based compensation, and share repurchases. Cost reductions from operational redesign contributed $0.05 per share to operating earnings in the quarter.

Net sales for the quarter declined 5 percent to $7.38 billion from $7.75 billion in the same quarter last year, due to portfolio changes and negative currency impacts, and missed thirteen Wall Street analysts' consensus estimate of $7.80 billion.

Volume grew 3 percent with growth in all segments except for Electronics & Communications. However, sales for the quarter declined across all segments and operating regions.

Agriculture sales declined 4 percent to $1.73 billion, electronics & communications sales slid 11 percent to $573 million, and performance materials' sales dropped 4 percent to $1.46 billion from last year.

Safety & protection sales declined 3 percent to $943 million, performance chemicals sales were down 6 percent to $1.56 billion, industrial biosciences sales decreased 1 percent to $322 million, and nutrition & health sales dipped 3 percent to $843 million from a year ago.

U.S & Canada sales declined 3 percent, Asia Pacific sales decreased 5 percent, Latin America sales dipped 10 percent and sales in Europe, Middle East & Africa or EMEA, dropped 5 percent from last year.

Segment operating earnings grew 8 percent to $1.01 billion, reflecting "disciplined execution despite macroeconomic headwinds, including a weaker Ag economy and the impact from a stronger U.S. dollar."

"Our 2014 results demonstrate continued progress on our strategic plan to deliver higher growth and higher value, including ongoing portfolio refinement through several strategic portfolio actions and steady progress on the planned Chemours separation, substantial cost reductions from our operational redesign and productivity initiatives, and the continued return of capital to our shareholders through $2 billion of share repurchases and an increase in the common stock dividend of 4 percent," CEO Ellen Kullman said.

Looking ahead to fiscal 2015, operating earnings are expected in a range of $4.00 to $4.20 per share. Street is currently looking for full-year 2015 earnings of $4.46 per share.

This estimate includes about $0.60 per share negative currency impact, partially offset by the projected $0.35 per share of operational redesign savings in 2015.

The company noted that it made rapid progress in its redesign initiative and enabled it to achieve a $1 billion run-rate target by year end 2015, well ahead of schedule. The company has now identified at least $300 million of additional opportunities to streamline operations and reduce costs, and has increased its cost reduction commitment to at least $1.3 billion of total expected savings by 2017.

The company also added that it expects to return all or substantially all of the one-time dividend proceeds from Chemours to DuPont shareholders via share repurchases over the 12 to 18 months following the separation of Chemours.

"In 2015, we remain focused on generating superior returns for our shareholders, including through return of capital from the expected Chemours dividend, while positioning DuPont for our next stage of growth," Kullman added.

DD closed Monday's regular trading at $74.11, up $0.14 on a volume of 2.79 million shares.