DuPont Seeds Cause Growth

Ellen Kullman,

chairwoman and CEO, went on CNBC Squawk Box via video call to discuss the state of her company, adding her feelings about the global economy into the mix. DuPont's revenue increased by two percent to $10.4 billion, with a four percent volume growth in the Americas and global volume growth of two percent. Kullman said she was cautiously optimistic about the global economy, citing strength in agriculture, but a weakness in auto sales and an uncertainty that spans over the industrial market. DuPont, famous historically for its chemicals, has been planting seeds in the agricultural industry for some time now. Now, those seeds have grown into profits. DuPont has more than doubled its first quarter net income. DuPont reported a net income of $3.35 billion ($3.58 per share) for their last quarter, increased from $1.49 billion ($1.58 per share) from last year's same quarter. Part of this is from DuPont's agriculture sales, which have increased by 14 percent to $4.67 billion over their last quarter. This has partially been due to their drought resistant seeds, which have a nine percent yield advantage in water restricted areas and a two percent yield advantage in normal conditions. This makes them very desirable to most farmers. Another part of DuPont's gain came from the sale of their performance coatings, which make automotive and industrial paints. Before selling, they endorsed NASCAR 24. "We sold our performance coatings business in February, so that is now not part of the DuPont company. So now, unfortunately, we did sell Jeff Gordon along with it," said Kullman. Some performance chemicals change in value from year to year, according to the movement of commodity chemical cycles. This caused certain DuPont chemicals, like titanium dioxide, the whitening agent in things like toothpaste and paper, to decline in value. "It's price does go up and down based on capacity utilization. Coming through last year, demand came off, utilization dropped and price started to fall in the second part of last year," said Kullman. That drop, however, hasn't stopped the good news from coming in. DuMont has also announced a five percent increase in its quarterly cash dividend. With numbers like these, Kullman's cautious optimism about global markets might just turn into flat optimism. "I think there's a belief that 2013 is going to strengthen with each quarter as we go through it," Kullman said.