"The agriculture sector, with its terrific fundamentals, will prove unique in an otherwise challenging and eroding macroeconomic environment"
DuPont Profit Jumps 26% on Crop Seeds, Pesticides (Update2)
By Jack Kaskey
April 22 (Bloomberg) -- DuPont Co., the third-biggest U.S. chemical company, said first-quarter profit rose 26 percent as record grain prices boosted sales of pesticides and genetically modified corn and soybean seeds.
Net income climbed to $1.19 billion, or $1.31 a share, from $945 million, or $1.01, a year earlier, Wilmington, Delaware- based DuPont said today in a statement. Sales gained 9.3 percent to $8.58 billion.
Chief Executive Officer Charles O. Holliday Jr. is investing in the company's Pioneer unit, the world's second-largest seed producer, to challenge Monsanto Co.'s lead in sales to farmers. Corn futures reached a record this month, and soybeans hit an all-time high in March, giving growers more to spend on engineered seeds and crop chemicals.
``The agriculture sector, with its terrific fundamentals, will prove unique in an otherwise challenging and eroding macroeconomic environment,'' Robert Koort, a New York-based analyst at Goldman, Sachs & Co., said in an April 14 report. He rates the shares ``buy.''
The company said on April 10 that earnings rose to about $1.29 a share, and the average estimate of 13 analysts in a Bloomberg survey was $1.28.
2008 Forecast
Profit for the full year will rise to $3.40 to $3.55 a share, including $1.05 in the second quarter, DuPont said, repeating the April forecast. Analysts in the survey had estimated $3.48 for the year and $1.08 in the second quarter.
DuPont had net income of $3.22 a share last year, including $1.04 a share in the second quarter.
Profit rose in three of the company's five main business units.
Operating profit in the agriculture unit increased 21 percent to $786 million, DuPont said. The unit accounted for 34 percent of DuPont's sales in the quarter, which typically is its strongest period because growers in the Northern Hemisphere are preparing for spring planting.
Profit in the electronics business surged 41 percent because of strong demand for solar-cell materials and refrigerants, DuPont said.
Performance-materials profit increased 8.4 percent, excluding a year-earlier charge, because of higher prices and improved demand in Europe and Asia for automotive plastics and packaging materials, DuPont said.
Coatings Profit
Profit in the coatings unit, the world's biggest maker of automotive paints, fell 2.1 percent because of weak North American auto and construction markets, DuPont said. Profit in the safety and protection unit, which makes Kevlar, Nomex and Tyvek insulation, fell 6.5 percent as demand decreased and the company sold a business.
DuPont rose 23 cents to $52.25 yesterday in New York Stock Exchange composite trading. The shares have added 19 percent this year, compared with a 3.3 percent decline in the Dow Jones Industrial Average, composed of 30 companies, including DuPont.
Dow Chemical is the largest U.S. chemical maker, followed by Exxon Mobil Corp.
