E.I. du Pont de Nemours and Company (DD)
E.I. du Pont de Nemours & Company (DD: Charts, News, Offers) otherwise known simply as “DuPont” lead an impressive day of earnings reports. This key Dow component joined a large group of publicly held companies such as Lockheed Martin (LMT: Charts, News, Offers), Under Armour (UA: Charts, News, Offers) and Western Union (WU: Charts, News, Offers) who reported earnings that beat estimates today in reporting that second-quarter profit nearly tripled in a surge in sales and volume in all six of the company’s business segments.
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Stock Analysis
DuPont is one of the world’s best known companies. Typically referred to as a “chemical maker”, DuPont has a hand in the manufacture and production of almost every product used in contemporary society. The DuPont conglomerate is divided into six different segments. Agriculture and Nutrition is DuPont’s largest segment dealing with everything from seeds to animal genetics to pesticides. DuPont operates the well-known Pioneer seed brand. The Safety and Protection division makes items such as Kevlar vests and other workplace safety products. DuPont’s Performance Coatings segment is the world’s largest manufacturer of titanium dioxide, a product used in paint, plastics and paper. Another DuPont segment, Performance Materials produces resins made in cars, make-up and computer chips. Electronic and Communications focuses on printer ink, plasma televisions, refrigeration chemicals and more. DuPont’s final segment handles pharmaceuticals. The company does not manufacture or distribute medication, but owns part of the licensing interest for high blood pressure drugs, Cozaar and Hyzaar. DuPont’s agreement is with Merck (
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In Q2, DuPont total revenue increased 25.6 percent to $8.62 billion. Net income was $1.17 billion, translating to $1.26 per share, almost tripling the 2009 corresponding earnings of $417 million or $.41 per share. All of DuPont’s six divisions posted double-digit growth. Regionally, the Asia Pacific region revenue nearly doubled to reach $1.8 billion, emerging markets posted 32% growth, United States 18% and Europe, the Middle East and Africa posted a combined 24 percent. As a result of this earnings report, the Wilmington, Delaware corporation revised its 2010 earnings forecast from the previous range of $2.50 to $2.70 up to a range of $2.90 to $3.05 per share. Prior to the earnings report, DuPont declared a third quarter common stock dividend of $.41 cents and was the 424th consecutive quarterly dividend since 1904.
DuPont CEO Ellen Kullman summarized the good news for the company this way, “Our outstanding focus and disciplined execution delivered excellent results. DuPont’s global team worked closely with customers, applying the breadth and depth of our science capabilities to meet market needs. We grew sales across every segment. Several businesses, including electronics and titanium dioxide, delivered results that far exceeded pre-recession levels. We continue to hit our productivity and cost-control targets, and remain highly disciplined in creating operating leverage to further grow the company.”
DuPont has several key characteristics that make it a strong company even in a shaky global economy. The first is a science-based approach to problem solving. The research and development departments at DuPont truly believe that there is no industry or consumer problem that cannot be solved if given enough time. One of their slogans is that the company “puts science to work”. The second is the company legacy. The company itself is over 200 years old, making it one of the oldest companies in the United States and proving that the company business model can adjust to changing markets and reinvent itself – in one sense, this company might be the leader in changing markets and the catalyst behind most of our modern lifestyle – making it the company to which all other companies adjust. The last critical characteristic is diversity in two ways: the variation and breadth of products and the fact that DuPont is a truly global company.
This good earnings report is just another affirmation of the strength of DuPont and hopefully, it is also a harbinger of a broader based global economic recovery.
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