DuPont Trims 2011 Outlook - Analyst Blog
December 12 2011 - 3:15AM
Zacks
E. I. du Pont de Nemours
and Company (DD) has slashed its full-year 2011 outlook
citing slower growth in some of its businesses due to weakness in
the company's end markets.
For 2011, DuPont forecasts earnings
in the range of $3.87-$3.95, down from its earlier forecast of
$3.97-$4.05. The company’s lowering of outlook reflects destocking
in some industrial supply chains that has sped up in the current
quarter, due to softening demand in consumer electronics and
continued weakness in housing and construction markets.
As per the company, it is seeing
slower growth in certain segments driven by global economic
uncertainty, which contributed to the ongoing conservative cash
management in some supply chains.
However, not all of DuPont’s
businesses are suffering. As per the company, demand in its
agriculture and food segment continues to be strong, due to solid
volume growth during the current summer months in Latin
America.
Recently, DuPont released its
third-quarter results; reporting a net income of $452 million or 69
cents per share in the third quarter of 2011 from $367 million or
40 cents per share in the same quarter of 2010. The profit exceeded
the Zacks Consensus Estimate of 56 cents per share.
The improvement in profit was
attributable to higher selling prices, increased sales volume and
currency benefit, partly offset by higher raw material, energy, and
freight costs.
Sales in the quarter grew 32% to
$9.2 billion, up from the Zacks Consensus Estimate of $8.9 billion.
The increase in sales reflected a rise of 1% in sales volume, a
hike of 15% in local price, 4% currency benefit and 12% net
increase from portfolio changes. Sales in the developing markets
rose 38%.
DuPont is a global chemical and
life sciences company, employing more than 60,000 people worldwide
with a diverse array of product offerings. With over 21,000 patents
and 15,000 patent applications worldwide, DuPont sells its products
in diverse markets, such as transportation, construction, apparel,
agriculture, nutrition and health, packaging and electronics
markets.
DuPont faces stiff competition from
BASF SE (BASFY) and The Dow Chemical
Company (DOW).
The company currently retains a
Zacks #3 Rank, which translates into a short-term Hold rating. In
addition, we reiterate our long-term Neutral recommendation on the
stock
BASF SE (BASFY): Free Stock Analysis Report
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