It's been a tale of two halves for chemical and materials giant DuPont (DD) in 2012. The stock took off early in the year, seemingly headed toward a banner performance that made investors cheer. As the economy slowed, however, a disappointing third quarter sent DuPont shares into the gutter. As investors shake their heads over this Dow Jones Industrial Average (^DJI 0.60%) stock's 6% year-to-date loss, it's time to take a look back and see just what went right and wrong for DuPont in 2012.

A strong start to 2012
DuPont's first quarter couldn't have been scripted any better. The company's acquisition of Copenhagen-based food ingredient company Danisco paid off handsomely in the year's initial results. DuPont's first-quarter sales flew higher by 12%, with Danisco's purchase fueling a significant amount of that increase by itself. Not surprisingly, this was the best time of 2012 for DuPont's stock: Shares skyrocketed nearly 14% from the beginning of the year until the end of March.

Danisco's acquisition fell in line with DuPont's swing toward focusing heavily on agricultural and food business, a trend that began early in the year and continued throughout 2012 with moves including the company's partnership with South African seed company Pannar Seed. The company has set its sights squarely on the likes of Monsanto (MON) as DuPont's agriculture business -- the company's largest division by sales throughout the year -- blossomed at year-over-year growth rates of 16% in the first quarter and 13% in the second.

The glut of cheap natural gas in the U.S. probably hasn't hurt DuPont, either. Chemical companies such as DuPont and rival Dow Chemical (DOW) have seen chemical-production costs fall as domestic natural gas has remained cheap and plentiful, giving their plants a cost advantage over overseas-based ones.

The Danisco purchase also boosted DuPont's profile in Europe: The company grew sales in the Europe, Middle East, and Africa -- a.k.a. EMEA -- region by 14% in the first quarter and 7% in the second quarter. This trend wouldn't work out so well for the company, however: As the global economy tightened and Europe fell toward recession later in the year, DuPont had to readjust its global strategy.

Third-quarter blues
International sales decimated DuPont's third-quarter numbers. The company's EMEA and Asia-Pacific sales each declined 15% year over year. Between that and the company's move toward focusing on agriculture, DuPont finally sold its performance coating division -- previously one of its largest branches by sales -- to the Carlyle Group (CG). Though the deal makes good sense for DuPont, given the division's middling margins and high exposure to Europe -- 43% of the performance coating branch's sales came from the EMEA region -- the $4.9 billion price tag is barely more than the division made over the course of 2011 alone.

Still, it gets rid of a potential anchor on DuPont's numbers; given how bad the third quarter was, that $4.9 billion could come in handy. Sales dropped 9% year over year that quarter, and the company barely squeaked out a net profit after net margin exceeded 10% in the first half of the year. While agriculture sales still managed to record annualized growth, justifying the company's faith in its largest segment, every other division saw revenue dive. DuPont's second-largest branch, performance chemicals, sank 19% for the quarter.

Speaking of international woes, China's slowdown worsened that ugly third-quarter result. The decline of Chinese infrastructure spending took down DuPont's Asian sales and contributed to that poor net profit result. While chemical competitors such as Dow and Eastman Chemical (EMN -0.85%) also saw net profit declines in the third quarter, neither took the hit as badly as DuPont, which was forced to announce the elimination of 1,500 jobs.

Despite DuPont's stock plunge in the latter half of the year, there's still cause for investor optimism. Fortunately, the company plans to curtail spending next year and focus on its steady agricultural business. DuPont still expects full-year 2012 earnings to end up near the high point of its prior guidance despite last quarter's flop. As a final bit of optimism, if the U.S. manages to avoid going off the fiscal cliff, the company should be well-positioned to resume growth after reducing lagging foreign exposure such as its performance coating branch.

If all else fails, that juicy 4% dividend still looks healthy – even with dividend taxes set to increase with the fiscal cliff.

Ending 2012 on a down note
DuPont pulled investors every which way in 2012, soaring through the first quarter and plummeting after the release of the third-quarter earnings. While investors might be wary of this time-honored company, given a fragile global economy and the looming threat of the U.S. falling off the fiscal cliff, DuPont's shift to agriculture and shrinking exposure to recession-torn Europe show that the company is thinking ahead. If the economy manages to improve, this stock could make investors forget all about an up-and-down 2012.