RSS Feed
TwitterAlmost like a tit for tat to the depressing NAR reports that came in yesterday, DuPont results thankfully brought some good news today. 
E. I. du Pont de Nemours and Company, more commonly DuPont or Du Pont, the world’s second largest chemical company (after BASF) in terms of market capitalization, reported a fourth quarter profit that surpassed analysts’ estimates with a net income of a whopping $441 million, or 48 Cents a share, as compared to a net loss of $629 million, or 70 Cents, a year earlier. Coming as a pleasant surprise, profit beat the 41% average estimate of 14 analysts surveyed by Bloomberg, at 44 cents a share (with the exclusion of some items). Its sales volumes had fallen by as much as 20% during the recession, and reported a growth in the fourth quarter for the first time since mid 2008.
DuPont is organized into the following five categories, known as marketing “platforms”: Electronic and Communication Technologies, Performance Materials, Coatings and Color Technologies, Safety and Protection, and Agriculture and Nutrition.
This is attributed mainly to a reduction in costs and a growth in volumes. It must be noted that as volumes grew by 10%, raw material, energy and freight costs dropped by 20%. DuPont is said to have reduced fixed costs by $1 billion last year, partly by eliminating 14500 of its employees. Revenues were fuelled by gains in the electronic materials and plastics for auto parts.
Analysts also second the stand. It is claimed that auto end markets are indeed reviving, and even in electronics, consumerism is gaining the much needed momentum. Intel Corp., the world’s biggest chip maker, posted a 28 percent revenue gain for the fourth quarter as well. U.S. auto sales increased 15 percent in December. The performance-materials unit of DuPont, which makes plastics for car parts and gets about 40 percent of sales from the auto market, posted pretax profit excluding some items of $174 million, compared with a $129 million loss a year earlier.
The company is also said to have benefited from a 20% decrease in the raw material costs (including energy and freight requirements) during the quarter. Restructuring charges were also reduced by $55 million, boosting net income by about 4 cents a share.
“We will continue the momentum generated from last year’s aggressive cost-cutting and cash-generating actions,” said CEO Ellen Kullman. Sales rose about 36 percent in the Asia Pacific region, 6 percent in Europe and the Middle East, and 12 percent in Canada and Latin America. U.S. revenue declined 2 percent on lower prices. DuPont says demand in the Asia Pacific region was strong, topping levels seen before the global recession.
The company is now committed to a 20% compound annual earnings growth goal for the 2009 to 2012 time period. Cash flow for 2010 is also expected to be higher by $1.5 billion.
“We remain confident in our performance outlook for 2010, based on improving economic conditions coupled with well-positioned and streamlined businesses.” said Kullen. And though analysts are still unsure about the company’s long term prospects, especially since it faces a lot of stiff competition from rivals, a point that can be highlighted is that, since the company produces the raw materials which are required for a whole lot of other common items, a boost in business here, is often indicative of good economic health.
It certainly seems like the silver lining in a dark cloud of statistics.
Posted in 
Tags:
[...] as Q4 09 Revenue Rises Posted by Prabhjot Singh on January 27th, 2010 Continuing the trend of positive Q4 results from Dupont and Google earlier in the week, Yahoo! (YHOO) today announced their financial figures for Q4 and [...]