NEW YORK – DuPont Co.'s (DD) quarterly profit missed Wall Street estimates as high energy costs and weak sales hurt its farm seed and car coatings divisions, the No. 2 U.S. chemical maker said on Tuesday.
DuPont, a component of the Dow Jones industrial average (search), also lowered its 2005 forecast and its shares fell nearly 5 percent in early trade, weighing on blue-chip stocks.
Excluding a gain of $111 million, or 11 cents a share, on asset sales and a favorable tax gain, the company earned 90 cents a share in the second quarter, missing the average forecast of 96 cents among analysts polled by Reuters Estimates.
Including the gain, net income in the second quarter increased to $1.02 billion, or $1.01 a share, from $503 million, or 50 cents per share, a year earlier.
Looking ahead, DuPont lowered its 2005 earnings to $2.64-$2.69 a share, before gains, because of higher-than-expected energy costs and weakening volumes.
"It's a pretty poor earnings release," said David Begleiter, chemicals analyst with Deutsche Bank.
He blamed the weak second-quarter results on flat volumes, high costs for oil and natural gas, which companies use to run plant and make chemicals, and a poor performance in two of DuPont's key segments -- Agriculture and Nutrition, and Coatings and Color technologies.
Consolidated net sales for the quarter totaled $7.5 billion, unchanged from a year earlier, as volumes were flat and prices rose 6 percent.
Earnings for Agriculture and Nutrition rose 6 percent, a disappointing figure, Begleiter said, due to lower corn seed demand in Europe, which was hurt by poor weather. Coatings and Color Technologies earnings fell 9 percent, on high raw material costs and declining auto production.
While DuPont still expects positive price momentum for the rest of the year, it warned that energy and ingredient costs would be at least $1 billion higher than in 2004.
Shares fell $2.06, or 4.7 percent, to $41.98 on the New York Stock Exchange (search).
Stock of the Wilmington, Del.-based company fell more than 12 percent during the second quarter, underperforming peers on the S&P Chemicals index, which fell more than 8 percent over the same period.