Jeff Gordon's DuPont
One such area is the next-generation military vests produced by companies like DHB
Fiscal 2005 first-quarter sales came in at $7.8 billion, down from last year's mark of $8.2 billion. However, when you exclude its divested textiles biz, which accounted for $1.9 billion of revenues in the first quarter of 2004, DuPont's sales actually increased 11% year-over-year. Double-digit revenue growth is impressive for a company of this size.
One concern for investors is whether it is able to handle rising energy and raw materials costs. DuPont states that 5% higher prices on its products were enough to absorb the negative effect of increased ingredient costs. The result is that its operating profit margin, which was 9.8% a year ago, showed a dramatic improvement to 19% -- better by 93.9%.
DuPont's strong margins allowed it to earn $0.96 per share for the period -- 45% higher than a year ago. Because of its solid quarterly results, the company reaffirmed its earnings estimate of $2.65 to $2.85 per share for fiscal 2005. At a price of around $46.50, the enterprise is valued at 16 times current-year earnings.
This company is no Gordon racecar, but its earnings and sales growth give it enough acceleration to support the stock's valuation. At this level, DuPont certainly warrants further consideration for potential investors.
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