UPDATE: DuPont 2Q Net Improves By 5.1% On Higher Sales, Pricing

The head of DuPont Co. (DD) on Thursday said solid demand and price increases provided a springboard for the second half of the year though rival chemical-sector executives offered a more-cautious outlook.

The diversified U.S. manufacturer raised its full-year profit guidance after beating expectations with a 5.1% rise in second-quarter profit, helped by broad-based volume growth and higher prices in products such as titanium dioxide, a widely used paint pigment.

"It bodes well for a strong finish to the year," said DuPont Chairman and Chief Executive Ellen Kullman on a call with reporters, pointing to a rebound in key markets such as autos and photovoltaic cells used by the consumer-electronics sector.

Her outlook contrasted with that of BASF SE (BAS.XE, BASFY), the world's largest chemicals company by sales. Executives said growth would slow after the company had satisfied pent-up demand from customers.

The German company said Thursday it was largely able to pass sharp raw-materials cost increases on to customers, though it faced a tougher task with downstream industries such as performance and paper chemicals.

Kullman was more bullish about pass-through, with average prices having climbed 10% year-to-year in the first half and expected to rise across DuPont's portfolio.

She said there were no signs of demand destruction from higher prices for titanium dioxide, which is widely used as a paint pigment and heavily dependent on demand from the auto sector. Global auto builds are seen up 4% to 5% this year, but the U.S. housing market--another large paint consumer--is still seen as flat.

DuPont's second quarter was boosted by currency gains, which are seen providing a tailwind for the rest of the year, as well as gains in its agribusiness unit, the largest contributor to operating profit.

The full-year profit outlook was lifted to $3.90 to $4.05 a share from $3.65 to $3.85.

The company closed its acquisition of Danish food-ingredients and enzymes company Danisco in May, and the business contributed a 20% increase in segment pre-tax adjusted operating income to the latest quarter. The addition of Danisco enables DuPont to diversify away from its commodity-chemical roots toward faster-growing product areas such as high-tech seeds.

The second-quarter profit of $1.22 billion compared with $1.16 billion a year earlier, with per-share profit rising to $1.29 from $1.26 a share, a year earlier.

DuPont shares were recently up 2.1% at $53.38. BASF shares slid 5% to 62.55 euros ($89.47).

-By Doug Cameron, Dow Jones Newswires; 312-750-4135;

doug.cameron@dowjones.com

-John Kell and Harriet Torry contributed to this article.

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