Tuesday, July 21, 2009

DD- Earnings(Richie Civello)

Wilmington-based DuPont on Tuesday reported earnings of $417 million, or 46 cents per share, in the three months ended June 30, down from $1.08 billion, or $1.18 per share a year earlier.Overall revenues tumbled 24 percent to $7 billion, from $9.3 billion a year ago.Excluding one-time items, adjusted earnings were 61 cents per share, beating the consensus estimate from analysts polled by Thomson Reuters of 53 cents a share on revenue of $7.1 billion.

Overall product volume is down 19%. Chemicals produced by the company are used in a wide variety of industries and are a main component of the decreased volume. Auto and housing products are also reasons for this decrease in business. On the positive side DuPont's agriculture segment saw positive growth due to increased prices.

Much of their profit is due to cost cutting which the company says the company can maintain at a 75% level. Also new product volume is up 20% to 316 products when compared to YoY numbers.

I am concerned that the company will stay within the same range unless there is some significant growth in either the housing/auto industries. Their agriculture segment, while strong, is too small a segment to keep the company up. In order for DD move out of the high $20 range either positive auto or housing news will hae to come out.

No comments: