Market Overview

DuPont Higher after Upbeat Earnings

Shares of DuPont (NYSE: DD) are up 1.5 percent in pre-market trading after reporting earnings that beat Wall Street expectations. Fourth quarter earnings per share came in at 11 cents (excluding items) beating analysts' consensus of seven cents. Revenue was in line at $7.3 billion.

What may excite investors most Tuesday is the upbeat 2013 forecast. Analysts predicted earnings per share at $3.84 but the company said it expects EPS to be in the range of $3.85 to $4.05. DuPont projects revenue at $36 billion—in line with expectations.

The Agriculture division was up 18 percent while performance chemicals, a bright spot for the company in 2012, was down 15 percent.

Investors may scoff at the company's reported net income of $111 million or 12 cents per share—down from $373 million or 40 cents per share one year earlier. CEO Ellen Kullman said, “2013 is setting up to be a cautious year. How will the U.S. economy respond?”

Some of the pre-market bounce is likely due to the more upbeat headlines compared to the sobering third quarter earnings report. In October, the company reported that earnings fell 98 percent as demand softened On top of that, it was hit by large, one-time charges.

DuPont also announced it would cut 1,500 positions by 2014. This sent investors running as the stock fell nearly 16 percent before rebounding. This news was particularly shocking to investors after DuPont had reporting rising revenues for the prior three quarters.

DuPont, the largest U.S. chemical manufacturer by market cap, manufactures everything from Corian countertops to chemicals that protect crops, liquid crystal display materials used in electronics to automotive solutions. It was founded in 1802 to make gunpowder.

Because of the diversified nature of its business, the company is levered to market forces in the agriculture, home building, automotive, health care markets, and more.

After falling nearly 16 percent, the stock has staged an impressive rebound. Already up more than four percent this year alone, the stock is trending higher since finding a bottom in mid-November.

Going into Tuesday's trading day the stock is only two percent away from testing the 200 day moving average after climbing above its 50 day moving average in December.

To date the stock has retraced 12 percent of its 16 percent drop. A rise above the 200 day moving average could catapult the stock to pre-plunge levels.

Analyst estimates are generally positive. DuPont currently has eight Buy or Strong Buy ratings and 11 Hold ratings.

Posted-In: Ellen KullmanEarnings News Management Best of Benzinga

 

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