DuPont Sees Strong Third-Quarter 2014 Profits, Warns of Agriculture Headwinds

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Researched by Industrial Info Resources (Sugar Land, Texas)--DuPont (NYSE:DD) (Wilmington, Delaware) reported its third-quarter net earnings rose 52% to $433 million from a year earlier, with gains in five of its seven business units. Third-quarter sales fell 3% to $7.5 billion as a result of portfolio changes, the diversified company reported.

Capital expenditures for the first three quarters of 2014 totaled $1.35 billion, compared with $1.27 billion in the same period last year.

Industrial Info is tracking 17 DuPont projects worth $861 million. The expansion of the Altamira titanium dioxide (TiO2) plant in Mexico has a total investment value of $500 million, with completion expected in third-quarter 2015. The commercial-scale cellulosic fuel ethanol plant in Nevada, Iowa, is valued at $275 million, with completion planned for the fourth quarter of this year.

View Project Report - 300034779 300014862

Chair and Chief Executive Officer Ellen Kullman said DuPont's earnings grew, despite a sluggish global economy and a weaker agriculture environment.

The company said its Agriculture segment saw an operating loss of $55 million, but this was 11% better than the loss that was incurred in third-quarter 2013. The improvement was driven by lower seed input costs and operating cost improvements, DuPont said, which were partially offset by lower sales volumes and the absence of a $26 million gain from the acquisition of a controlling interest in Pannar Seed during third-quarter 2013.

Operating earnings for its Nutrition & Health segment jumped 23% to $100 million, while earnings for the Safety & Protection segment grew 18% to $201 million.

Third-quarter earnings for the Electronics & Communications segment fell 3% to $94 million.

Earnings for DuPont's Performance Chemicals segment fell 5% to $249 million amid a 2% drop in TiO2 sales, but company executives said during the earnings conference call that operating income for the segment was expected to substantially increase in the fourth quarter.

DuPont plans to spin off its Performance Chemicals segment by mid-2015.

Activist investor Trian Fund Management LP is pressing for DuPont to split into two companies--one that is focused on Agriculture, Nutrition & Health, and Industrial Biosciences, and the other to include Performance Materials, Safety and Protection, and Electronics & Communications. DuPont executives say they see no need for the split as proposed by Trian.

Looking forward, the company said it expects to see continued sluggish growth in the global economy, as well as headwinds in agriculture.

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