While we're still in the relatively early stages of earnings season for the first quarter, it's becoming apparent that the industrial company that checks in with solid results will be a rare exception. On Tuesday, for instance, DuPont (NYSE:DD) joined Caterpillar (NYSE:CAT) in reporting a March period that, with a couple of notable exceptions, didn't reach the level of a shining star.
For the quarter, Delaware-based DuPont earned $488 million, or $0.54 a share, a significant slide from the $1.2 billion, or $1.31 a share, it posted in the first quarter of 2008. Revenue for the quarter fell to $7.27 billion, from $8.77 billion for the same quarter a year ago. That 17% slide followed a similar drop in the fourth quarter of 2008.
The company's two bright spots were its performance in its agriculture group, along with an assessment from management that sales in several areas began to strengthen somewhat in March. Of DuPont's five operating segments, only one displayed any sparkle during the quarter. Agriculture & Nutrition saw its sales increase to $3.1 billion, or 6% above the year-ago level. The company's other groups all suffered declines, led by the 45% drop in Performance Materials.
But despite the somewhat bright news about the slight March uptick, DuPont continues to gird for the possibility of a rougher road ahead. For instance, while it has thus far maintained a $730 million fixed-cost reduction goal, it now intends to increase that target to $1 billion. At the same time, the company maintains that it is developing "additional restructuring actions," which it expects to finalize during the second quarter of 2009.
Further, like Caterpillar, management has lowered EPS expectations for this year. The new range of $1.70 to $2.10 a share represents a pullback from the previous target of $2.00 to $2.50 a share. All this, of course, results from DuPont's role as maker of materials that ultimately reach end use in a variety of consumer products, many of which have been subject to reduced demand during the past year or two.
We'll clearly garner more information on the global industrial sector on Friday, when we receive results from Honeywell (NYSE:HON) and 3M (NYSE:MMM), along with Dow Chemical’s (NYSE:DOW) report next week. In the meantime, I must admit to being somewhat intrigued by DuPont. For those with extended investment time horizons, it seems to be a company that, with its solid return on equity and more than 6% dividend yield, is worth ongoing Foolish attention.
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