Citing Global Anxiety, DuPont Gets Cautious on 2012
DuPont, which makes chemicals, hybrid seeds and Kevlar bulletproof fiber, said on Tuesday that it expected 2012 earnings to come in at the bottom of its prior forecast range, due in part to economic uncertainty circling the globe.
The updated forecast, for earnings at the "lower end" of a range of $4.20 to $4.40 per share, came after the company posted a higher-than-expected profit for the second quarter.
Analysts on average expect earnings of $4.25 per share this year, meaning DuPont could fall short of Wall Street's expectations.
Details on the 2012 forecast were sparse, but DuPont said in a press release that higher taxes and currency conversion would also weigh on results.
Chief Executive Officer Ellen Kullman sought to reassure investors. "Our teams continue to executive well in a dynamic environment," she said.
DuPont reported second-quarter net income of $1.18 billion, or $1.25 per share, down from $1.22 billion, or $1.29 per share, a year earlier.
Excluding one-time items, the company earned $1.48 per share. By that measure, analysts expected $1.46, according to Thomson Reuters I/B/E/S.
Revenue rose 8 % to $11.28 billion. Analysts had expected $11.27 billion.
Sales fell in all of DuPont's businesses, except those connected to the food sector.
In the performance chemicals unit, volume fell 10%, primarily because of weak demand for DuPont's titanium dioxide, or Ti02, paint pigment.
A 9% jump in selling prices partly offset the drop in volume.
DuPont is the world's largest producer of the critical pigment, which is used to give paint and other coatings a white hue.
Earlier this month Australia-based titanium ore miner Iluka Resources confirmed what many investors have feared for months: Softer demand and higher inventories of the pigment were affecting production.
The news dented shares of Iluka, as well as DuPont's titanium dioxide rivals, Tronox and Huntsman.
Trying to reassure markets, DuPont issued its own press release in mid-July, saying Ti02 demand in the second half of the year should be stronger than what Iluka predicted.
On Tuesday DuPont admitted there was "continued softness" in Ti02 demand, particularly in Asia and Europe.