How DuPont's Earnings Will Look Tomorrow

On Tuesday, DuPont (NYSE: DD  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever surprises inevitably arise. That way, you'll be less likely to have an uninformed, knee-jerk reaction that turns out to be exactly the wrong move.

As the chemical-industry representative in the Dow Jones Industrials (DJINDICES: ^DJI  ) , DuPont makes a wide variety of products for businesses including agriculture, electronics, plastics, and pharmaceuticals. But given the overall global economic weakness, can the company keep producing the results investors want to see? Let's take an early look at what's been happening with DuPont over the past quarter and what we're likely to see in its quarterly report.

Stats on DuPont

Analyst EPS Estimate

$1.52

Change From Year-Ago EPS

0.7%

Revenue Estimate

$10.41 billion

Change From Year-Ago Revenue

(7.3%)

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Will DuPont ramp up earnings this quarter?
Analysts have had mixed feelings about DuPont's earnings in recent months. They've cut their consensus estimates on earnings for the just-ended quarter by $0.04 per share, but they've boosted their full-year 2013 earnings-per-share figures by a nickel. The stock has responded with modest optimism, rising about 7% since mid-January.

DuPont has increasingly focused on the lucrative agriculture and farm products arena. With a variety of engineered seeds, fertilizers, and herbicides, DuPont has pushed forward in developing technology to help protect crops from threats like disease and changing weather conditions, such as last year's drought. The company has seen strong growth in the ag segment, and it expects double-digit sales growth in agriculture through 2013.

As part of its refocusing, DuPont made a big move to streamline its business during the quarter, finally closing on its $4.9 billion deal to sell its car paint division to private-equity firm Carlyle Group (NASDAQ: CG  ) . Carlyle arguably got a good deal, given the relatively low price, and it has a opportunity to whip the division back into shape. But the move should help DuPont improve its margins and reduce its exposure to Europe, whose economic woes have been holding the company back recently.

Another important move DuPont made recently was settling a lawsuit with rival Monsanto (NYSE: MON  ) , with DuPont agreeing to pay more than $1.75 billion over the next 10 years in order to secure licensing rights for various products. In exchange, the two competitors agreed to dismiss their respective claims against each other, resolving what could have been a long and ugly dispute.

In DuPont's report, be sure to watch closely at where the company is seeing the best growth prospects. If core businesses like its titanium dioxide production start to pick up in light of the housing recovery, then DuPont may move back from its ag focus to become more of a conglomerate again.

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  • Report this Comment On April 22, 2013, at 2:06 PM, funfundvierzig wrote:

    In December 2012, DuPont Management announced they would no longer report earnings according to Generally Accepted Accounting Principles. Why?

    We strongly suspect DuPont execs are eager to downplay and disguise massive looming charges to settle claims emanating from what has turned out to be the largest, most costly new product failure in 21st century corporate America. That milestone failure is tree-killing DuPont Imprelis, which has ignited tens of thousands of claims in hundreds of lawsuits in federal and state courts. A settlement in one such court has been announced by plaintiffs' attorneys in the class action lawsuit in the Philadelphia U. S. District Court which we believe may cost DuPont upwards of $700 million or MORE!

    Fellow investors, look at those fine print footnotes buried under the NON-GAAP data tomorrow, April 23, 2013 to see how the colossal environmental and financial disaster called Imprelis will be handled or cosmeticised by DuPont's customarily secretive and evasive Management. ...funfun..

    Disclosure: We have both long and short positions in DD.

  • Report this Comment On April 22, 2013, at 2:17 PM, funfundvierzig wrote:

    Other possible massive charges which DuPont might take in Q1 or future quarters:

    * Write-offs or write-downs associated with the investment and development of the new Kullman Koolant (DuPont/Honeywell HFO1234yf), a grossly expensive car A/C refrigerant which has already been renounced by car-makers with a third of the global market after Daimler-Benz engineers found in independent tests the Kullman Koolant could potentially explode into a lethal toxic fireball in a serious crash.

    * Further write-downs connected with the dismembering and absorption of Danisco into the DuPont conglomerate bureaucracy.

    * Litigation costs in connection with the defeat in federal court and settlement of the Monsanto patent infringement litigation.

    * As yet unknown goodwill items.

    Merely the individual viewpoint of one retail investor...funfun..

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