DuPont Earnings Wrap Up

DuPont

shares traded down slightly after the company reported earnings and revised its full year outlook. DuPont reported earnings of $1.25, a 3 percent decrease compared to last year's second quarter. Sales increased by 7 percent, totaling $11 billion. DuPont reported adjusted earnings of $1.48 per share compared to average analyst estimates of $1.46 per share. The company missed on revenues, earning a total of $11.01 billion compared to an estimate of $11.25 billion. The company's weaker earnings could be attributed to a decrease in volume in its performance chemicals, electronics, and safety product segments. The company also saw decreased volume in Europe, the Middle East, Africa and Asia Pacific. The company was hurt by weakness and uncertainty in Europe. The company's net sales in Europe, Middle East and Africa were $2.5 billion, a 2 percent decrease from the first quarter of 2012. On a positive note, in the first half of 2012 the agriculture segment accounted for a 15 percent increase in sales and a 16 percent higher pre-tax operating income. These outcomes were a result of strong Northern hemisphere business performance for seed and crop production lines. It will be interesting to see if DuPont's agricultural segment is affected by the drought that has struck the US this summer. Agriculture sales accounted for $3 billion of the company's total sales of $11 billion. DuPont Chair and CEO Ellen Kullman commented, “Our agriculture, food and bioscience businesses are performing exceptionally well globally, and our advanced materials businesses are achieving solid results despite slower growth in some key markets and continued weakness in Europe. Our global teams continue to execute well in a dynamic environment, while investing for growth driven by science-powered innovation and collaboration.” DuPont's reaffirmed its outlook for the full year earnings is $4.20 to $4.40, but stated that it expects to be at the lower end of this range. The company states the reason for weaker expectations are macros, currency and a high tax rate. DuPont seems to be taking a more cautious approach for the second half of 2012. DuPont traded down about 1 percent on Tuesday.