DuPont Misses View, Lowers Forecast
{{#rendered}} {{/rendered}}
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.
{{#rendered}} {{/rendered}}
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.
{{#rendered}} {{/rendered}}
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.
{{#rendered}} {{/rendered}}
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.