Wilmington / DE. (dp) Chemicals giant E. I. du Pont de Nemours and Company (DuPont) announced its results for the fourth quarter and full year 2010. «The fourth quarter was a strong finish to an outstanding year. We laid the groundwork for recovery in 2009 and executed with precision and effectiveness in 2010, meeting and often exceeding our business goals and financial commitments, some a full year early», said Ellen Kullman, Chair and CEO of the Delaware company. «We continue to differentiate DuPont through sustainable growth, disciplined execution and ongoing productivity coupled with science-powered innovation to address population megatrends around food, energy and protection».
- 4Q/2010 Highlights:
- DuPont´s fourth quarter 2010 earnings per share were 0,40 USD, compared to 0,48 USD in the prior year despite a 0,14 USD per share Pharmaceuticals decline. Excluding significant items, earnings per share were 0,50 USD versus 0,44 USD in the prior year.
- Sales were 7,4 billion USD, up 15 percent versus prior year driven by twelve percent higher volume and six percent higher local prices, partly offset by two percent impact from currency and a one percent reduction from portfolio changes. Developing market sales increased 24 percent.
- Growth in sales was broad based across segments and regions, with particularly strong growth in Electronics + Communications and Performance Chemicals.
- Full-Year 2010 Highlights:
- 2010 earnings were 3,28 USD per share versus 1,92 USD in 2009. Excluding significant items, 2010 earnings were 3,28 USD per share versus 2,03 USD in 2009, up 62 percent.
- Sales increased 21 percent to 31,5 billion USD with sales volume approaching pre-recession levels driven by significant economic recovery in developed markets, share gains, and continued penetration of developing markets.
- Full-year free cash flow was 3,1 billion USD versus the company´s target of greater than 1,7 billion USD, primarily driven by higher earnings and working capital productivity.
- DuPont exceeded its full-year productivity targets of 400 million USD each for fixed costs and working capital.
- DuPont increased its full-year 2011 earnings guidance to a range of 3,45 USD to 3,75 USD per share. Previous guidance was 3,30 USD to 3,60 USD per share. Additionally, the impact of the planned Danisco acquisition could reduce 2011 earnings by 0,30 USD to 0,45 USD per share on a reported basis.
Business Review
The following is a summary of business results for each of the company´s reportable segments, comparing fourth quarter 2010 with fourth quarter 2009, for sales and PTOI excluding significant items. All references to selling price are on a U.S. Dollar basis, including the impact of currency.
Agriculture + Nutrition: Fourth quarter 2010 sales of 1,5 billion USD were up 13 percent, reflecting higher volume. Increased sales primarily reflect a strong start to the North American season, an increase in Latin America corn sales, an increase in Brazil soybean volume, and higher sales for crop protection products across all regions, led by continued expansion of Rynaxypyr® insecticide. PTOI for the fourth quarter was a seasonal loss of 117 million USD compared to a loss of 97 million USD in the fourth quarter 2009, reflecting continued growth investments.
Electronics + Communications: Fourth quarter 2010 sales of 0,8 billion USD were up 33 percent, reflecting 24 percent higher volume and nine percent higher selling prices, primarily pass-through of metals prices. Higher volume was driven by growth in all regions, particularly in Asia Pacific, and strong demand across most market segments, especially photovoltaics. PTOI of 98 million USD was up 37 million USD reflecting substantially higher volume.
Performance Chemicals: Fourth quarter 2010 sales of 1,7 billion USD were up 26 percent, principally reflecting 13 percent higher volume and 14 percent higher selling prices. Sales increased across all regions, especially in North America and Asia Pacific. Higher selling prices primarily reflect favorable pricing for titanium dioxide. PTOI was 315 million USD, an improvement of 107 million USD reflecting higher selling prices and volume.
Performance Coatings: Fourth quarter 2010 sales of 1,0 billion USD were up three percent, reflecting four percent higher volume, while selling prices declined one percent due to unfavorable currency impacts. Results reflect continued strengthening in industrial coatings, particularly the North American and European heavy duty truck markets, and modest growth in global automotive markets, most significantly in North America. PTOI was 71 million USD, essentially flat versus prior year.
Performance Materials: Fourth quarter 2010 sales of 1,6 billion USD were up eleven percent, with nine percent higher volume and a five percent increase in selling prices, partly offset by a three percent portfolio change. The higher volume reflects double-digit growth in Asia Pacific and North America. PTOI was 206 million USD, an improvement of 32 million USD, resulting from a 31 million USD combined benefit from an acquisition and an early termination of a supply agreement. The impact of higher volume was offset by a weaker overall sales mix and increased raw material costs.
Safety + Protection: Fourth quarter 2010 sales of 0,9 billion USD were up 13 percent from higher volume. Growth reflects increased demand for aramid and nonwoven products due to the continued recovery in industrial markets and strong demand across all regions. PTOI was 92 million USD versus 135 million USD in the prior year. The year-over-year reduction was due to higher raw material costs, higher spending for aramids growth initiatives and a net eleven million USD charge related to an asset impairment and a separate gain on an asset sale.
Outlook
The company revised its full-year 2011 earnings outlook to a range of 3,45 USD to 3,75 USD per share. Previous guidance was 3,30 USD to 3,60 USD per share. This revision reflects a lower base tax rate of 20 to 21 percent and reduced pension expense headwind, partly offset by anticipated dilution from increased shares outstanding. The earnings outlook reflects the expectation for continued steady global economic growth with increasing industrial production, favorable North American agricultural conditions, and the company´s further penetration of developing markets. Earnings from Pharmaceuticals are expected to decline about 280 million USD pre-tax versus 2010. DuPont announced January nine that it entered into a definitive agreement for the acquisition of Danisco A/S, expected to be completed early in the second quarter. The impact of this acquisition could reduce 2011 earnings by 0,30 USD to 0,45 USD per share on a reported basis.
