DuPont 2Q profit rises, beats expectations

Chemicals maker DuPont Co. said Tuesday that strong agriculture sales and emerging international markets helped fuel a rise in second-quarter profit by helping to offset weak domestic housing and auto markets.

Wilmington, Del.-based DuPont earned $1.08 billion, or $1.18 per share, during the quarter ending June 30, compared with profit of $972 million, or $1.04 per share, during the previous year's quarter. A lawsuit settlement and a lower tax rate from a one-time tax settlement accounted for 7 cents of the quarter's per-share earnings.

Excluding one-time items, the company posted an adjusted per-share profit of $1.11, topping Wall Streets' average view by 4 cents per share.

Revenue rose 12 percent to $8.83 billion from $7.88 billion a year earlier.

Analysts surveyed by Thomson Financial expected more modest adjusted earnings of $1.07 per share on revenue of $8.47 billion.

DuPont Chief Executive Charles O. Holliday Jr., speaking to investors during a conference call Tuesday morning, said the company was able to overcome accelerating costs of raw material and energy with strong growth in agriculture and emerging markets.

"Five years ago, we could not have delivered these results in this environment," Holliday said. "We are a very different company today, and I hope you see that in our results."

DuPont raised the lower end of its 2008 outlook slightly, now forecasting earnings of $3.45 to $3.55 per share, up from a prior view of $3.40 to $3.55. Analysts expect a profit of $3.50 per share. However, DuPont expects earnings in the second half of this year to decline from a year earlier.

Domestic sales managed 5 percent growth despite the weakness in housing and automotive markets, while sales outside the United States rose 18 percent. A 7 percent bump in local selling prices and a 5 percent currency benefit helped offset a 15 percent increase in costs from energy, raw materials and freight, the company said.

Sales in DuPont's agriculture and nutrition division during the quarter grew 23 percent to $2.5 billion on strong global demand for the company's corn, soybean and crop protection products.

Electronic and communication technologies sales rose 10 percent to $1.1 billion on price gains and favorable currency. A weakness in U.S. automotive electronics partially offset strong demand for solar photovoltaics, printed packaging and refrigerants, the company said.

Holliday said the housing and automotive markets will correct over time but higher oil and agriculture commodity prices are here to stay, so DuPont is looking at alternative energy to help spark future growth.

The company expects solar photovoltaic sales to more than triple within five years to top $1 billion, and it is also partnering with Genencor, a division of Denmark-based Danisco AS, on a three-year, $140 million project to develop and commercialize cellulosic ethanol.

DuPont Danisco Cellulosic Ethanol LLC expects its first pilot plant to be operational in the United States in 2009 and hopes to have a commercial-scale demonstration facility running by 2012. DuPont Danisco then plans to license its technology directly to ethanol producers.

DuPont is also teaming up with BP to commercialize biobutanol, an alternative fuel that could be blended in existing car engines at higher percentages than ethanol.

"Our cellulose ethanol and biobutanol offer great promise, and we're partnered for speed with Danisco and BP respectively," Holliday said.

DuPont shares rose $1.16, or 2.6 percent, to $45.21 Tuesday.