Jan 25 2012 --- DuPont’s $7.1 billion acquisition of Copenhagen-based Danisco A/S in June 2011 has helped boost the company’s performance in the fourth quarter of 2011, as it shifts from being a chemical producer into “a science company focused on meeting global demand for food, energy and safety.” DuPont’s nutrition unit, now the world’s biggest producer of food additives, added $34 million to pretax operating income.

Overall, fourth quarter 2011 earnings were $.35 per share, excluding significant items, reflecting a $.23 per share year-over-year headwind from a higher tax rate. Prior year earnings were $.50 per share, excluding significant items. Reported fourth quarter 2011 earnings were $.40 per share, unchanged from the prior year.

Sales grew 14 percent to $8.4 billion, principally from 14 percent higher local prices. A
10 percent net increase from portfolio changes was offset by a 10 percent volume decline.

Agriculture delivered an 8 percent sales gain in the fourth quarter and 23 percent sales growth for the second half. This reflects strong performance during the Latin American selling season.

Excluding significant items and Pharmaceuticals, segment pre-tax operating income increased over $100 million, or 18 percent versus the prior year, principally due to Performance Chemicals and acquisitions in Industrial Biosciences and Nutrition & Health.

"We delivered exceptional full-year results in 2011 despite significant market headwinds late in the year," said DuPont Chair and CEO Ellen Kullman. "Our market-driven science continues to meet customer needs in food, energy and protection. Acquisitions in Nutrition & Health and Industrial Biosciences, coupled with robust and disciplined productivity efforts across our businesses, contributed to our successful performance. We remain well-positioned to serve customers and innovate as key markets rebound and global population growth drives new opportunities."

Fourth quarter 2011 consolidated net sales of $8.4 billion were 14 percent higher than the prior year. Volume declines in all regions were driven by destocking in photovoltaics, polymer and industrial supply chains, as well as weaker demand for products supplying consumer electronics and construction. Agriculture volume increased and primarily reflects growth and penetration in the Latin American summer season. The table below shows regional sales and variances versus the fourth quarter 2010.

Fourth quarter 2011 net income attributable to DuPont was $373 million versus $376 million in the fourth quarter 2010. Excluding significant items, net income attributable to DuPont was $325 million versus $463 million in the prior year. The decrease principally reflects a higher tax rate. Higher selling prices more than offset increased spending for selling, marketing and research and development, higher costs for raw materials, energy and freight, and lower volume.

Segment pre-tax operating income (PTOI), excluding significant items, increased 16 percent to $763 million largely driven by improvements in Performance Chemicals and Agriculture, and acquisitions in Nutrition & Health (i.e. Danisco) and Industrial Biosciences.

Full year business segment performance was as follows:

Agriculture – Sales of $1.3 billion were up 8 percent, with 5 percent higher selling prices and 3 percent higher volume. PTOI seasonal loss of $(116) million improved $19 million due to higher sales. Full-year sales of $9.2 billion grew 17 percent with 10 percent volume gains, 6 percent higher prices and 1 percent impact from portfolio changes. Full-year PTOI grew 30 percent with 19 percent PTOI margins. In seeds, sales reflected success in each region with volume and price gains. In crop protection, sales growth was delivered in each product line and region.

Electronics & Communications – Sales of $630 million were down 18 percent reflecting 33 percent lower volume partially offset by 15 percent higher selling prices related to pass-through of metal prices. Lower volume reflects destocking in photovoltaics and softness in consumer electronics. PTOI of $42 million decreased on lower volume, partially offset by OLED technology licensing income of $20 million.

Industrial Biosciences – Sales of $289 million and PTOI of $34 million reflect the acquisition of Danisco's enzyme business. PTOI includes $6 million of amortization expense associated with the fair value step-up of acquired intangible assets.

Nutrition & Health – Sales of $806 million were up $468 million from the acquisition of Danisco's specialty food ingredients business. PTOI of $52 million reflects the acquisition and favorable product mix in Solae. PTOI includes $20 million of amortization expense associated with the fair value step-up of acquired intangible assets.

Performance Chemicals – Sales of $1.9 billion were up 12 percent, with 29 percent higher selling prices and 17 percent lower volume. Higher selling prices reflect pricing actions to offset higher raw material costs. Lower volume was attributable to a pause in demand for titanium dioxide, particularly in Asia Pacific. PTOI of $433 million increased $118 million on higher selling prices.

Performance Coatings – Sales of $1.1 billion were up 8 percent, with 10 percent higher selling prices and 2 percent lower volume. Higher selling prices reflect pricing actions across all market segments to offset higher raw material costs. Lower volume resulted from destocking and flat/lower builds in all regions except North America. Demand continued to be strong in the North American OEM motor vehicle and heavy duty truck markets. PTOI of $58 million decreased on weaker mix and a $7 million settlement.

Performance Materials – Sales of $1.6 billion were up 1 percent, with 14 percent higher selling prices and 13 percent lower volume. Higher selling prices offset higher raw material costs. Lower volume reflects broad-based channel destocking along with softening in consumer and industrial markets. PTOI of $151 million decreased due to lower volume and the absence of a prior year $31 million combined benefit from an acquisition and an early termination of a supply agreement.

Safety & Protection – Sales of $943 million were up 10 percent, with a 7 percent increase from the MECS acquisition and 5 percent higher selling prices, partially offset by 2 percent lower volume. Higher selling prices more than offset raw material cost increases. Volume was lower on destocking in the industrial markets. PTOI of $94 million was essentially flat. Prior year included a net $11 million charge related to an asset impairment and a separate gain on an asset sale.

DuPont has reaffirmed its full-year 2012 earnings outlook of $4.20 to $4.40 per share, an increase of 7 to 12 percent versus 2011, excluding significant items.