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Under New Management, DuPont Cruises

By David Smith – Updated Apr 6, 2017 at 12:29PM

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In a little more than 18 months leading DuPont, Ellen Kullman has left a footprint.

The market is confused. It's bathed daily in concern about the national debt, job scarcity, and maybe another recessionary round. But then there are companies like DuPont (NYSE: DD) and 3M (NYSE: MMM) that have systematically blown the doors off expectations.

Take a gander at these numbers: DuPont earned $1.16 billion, or $1.26 a share, in the quarter, up from $417 million, or $0.46 a share, in the second quarter a year ago. Adjusted earnings would have come in at $1.17 a share in the latest quarter. The per-share figure compares with the analysts' consensus of $0.93 per share. Net sales were $8.62 billion, up 26% from last year.

Indeed, all six of its segments achieved double-digit sales growth. Agriculture and nutrition -- easily the largest of the groups with $3 billion in sales -- expanded its top line by 16% and raised its pre-tax earnings by 31%. Unlike a couple of years ago, when all manner of U.S.-based companies benefited from international strength, DuPont's performance was most closely tied to North American seed sales.

And not all big agriculture companies matched those results. For instance, Monsanto's (NYSE: MON) earnings plunged a dramatic 45% for its most recent quarter. But DuPont CEO Ellen Kullman was hardly surprised by her company's ascendancy. As she observed on the call:

As expected, our Ag & Nutrition business had an outstanding quarter, thus concluding a very successful selling season for the northern hemisphere. The multi-year investment in our 'right product, right acre' seeds strategy focuses on our unique ability to optimize, [and grow] profitability field by field. This winning strategy sets us apart from the competition ...

At the same time, while far smaller than the agriculture unit, both electronics and communications and performance materials topped 45% in sales increases. And the latter segment exceeded all the others in pre-tax earnings growth in dollars.

The chemicals companies haven't yet all reported to us. While Ashland (NYSE: ASH) already turned in very solid numbers, Dow Chemical (NYSE: DOW), DuPont's largest competitor in the segment, will saddle up next Tuesday, while a pair of smaller manufacturers, Eastman Chemical (NYSE: EMN) and Celanese (NYSE: CE), took center stage today with strong showings. So the group clearly is feeling the recovery.

But it's clear that Ellen Kullman, who has been DuPont's CEO since 2008, has breathed life into a previously lackluster company, even without the benefit of her predecessor's University of Tennessee degree. And since people must eat, I'd urge Fools to keep close tabs on her ongoing handiwork.

Fool contributor David Lee Smith, who has a University of Tennessee degree hanging on a wall, doesn't own shares in any of the companies mentioned. He encourages your questions or comments. 3M and Monsanto are Motley Fool Inside Value recommendations. Motley Fool Options has recommended a synthetic long position on Monsanto. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

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Stocks Mentioned

3M Company Stock Quote
3M Company
MMM
$112.99 (-1.01%) $-1.15
DuPont de Nemours, Inc. Stock Quote
DuPont de Nemours, Inc.
DOW
E. I. du Pont de Nemours and Company Stock Quote
E. I. du Pont de Nemours and Company
DD
Monsanto Company Stock Quote
Monsanto Company
MON
Ashland Global Holdings Inc. Stock Quote
Ashland Global Holdings Inc.
ASH
$97.12 (0.09%) $0.09
Celanese Corporation Stock Quote
Celanese Corporation
CE
$91.00 (-3.12%) $-2.93
Eastman Chemical Company Stock Quote
Eastman Chemical Company
EMN
$72.69 (-2.74%) $-2.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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