DuPont reports 4Q earnings dropped

Published on NewsOK Modified: January 22, 2013 at 5:37 pm •  Published: January 22, 2013
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"We want to bring closure to this as soon as possible," he said.

DuPont also recorded asset impairment and restructuring charges totaling $99 million, and a pretax gain of $117 million associated with the sale of a business within its agricultural unit.

The company's fourth-quarter performance was led by the agricultural unit, which saw sales increase 18 percent to $1.5 billion on 11 percent higher volumes and 7 percent higher prices. Full-year sales for the agricultural unit were up 14 percent to $10.4 billion on 8 percent higher volume and 6 percent higher prices. DuPont said sales of its Pioneer seeds benefited from higher global volume and pricing gains in corn and soybeans, while strong demand for insecticides and herbicides resulted in increased sales of crop protection products.

Agriculture remains a key focus in DuPont's growth initiatives. Fanandakis noted that of the 12-cent per share impact from fixed costs in the quarter, more than half was related to growth projects, specifically agricultural research and development and selling expenses.

Matt Arnold, an analyst with Edward Jones, said agricultural product characteristics such as drought-resistance and pest resistance require intensive research and development, even if it takes years to see the payback.

"We think it's probably one of the best places to be active in terms of R & D," he said.

Meanwhile, cyclical pressure in the market for titanium dioxide, a whitening pigment with a broad range of industrial applications, contributed to a 15 percent drop in sales for DuPont's performance chemicals unit, which saw pretax operating income plunge 54 percent.

While acknowledging the cyclical nature of the TiO2 market, DuPont officials said they expect demand will rebound later this year with improvements in the U.S. housing market and China's economy.

"This is a very strong business," Kullman noted. "It's a very strong cash generator."

DuPont said weak demand for photovoltaic products used in solar panels partly offset increased demand for materials used in smart phones and tablet computers in the most recent quarter. For the year, the company's electronics and communications segment saw pretax operating income, excluding one-time items, drop 52 percent, to $172 million.

DuPont officials said the photovoltaics market has shown signs of stabilizing but remains volatile because of overcapacity.