DuPont Performance Boosted by Probiotics, Cultures and Enablers

The company benefited from Nutrition & Health. Sales of $853 million were reported, up 6 percent on 3 percent higher volume and 3 percent higher prices in Q4. Volume growth reflects strong demand for probiotics, cultures and enablers. Higher local prices in all regions were partly offset by unfavorable currency.

23 Jan 2013 --- DuPont has reported that fourth quarter 2012 earnings per share (EPS) from continuing operations, excluding significant items, was $.11 versus prior year earnings of $.26. Reported fourth quarter 2012 EPS from continuing operations was $.02 versus $.31 in the prior year.

Sales of $7.3 billion equaled the prior year. Three percent higher volume was offset by 2 percent negative currency impact and a 1 percent reduction from portfolio changes.

Segment pre-tax operating income (PTOI) was down, primarily reflecting lower price and volume in Performance Chemicals. Titanium dioxide pricing led the decline.

The company benefited from Nutrition & Health. Sales of $853 million were reported, up 6 percent on 3 percent higher volume and 3 percent higher prices in Q4. Volume growth reflects strong demand for probiotics, cultures and enablers. Higher local prices in all regions were partly offset by unfavorable currency. PTOI of $66 million was up $14 million on higher sales and the benefit of synergies realized from the integration of the Danisco specialty food ingredients business, partly offset by higher raw material costs.

Agriculture sales of $1.5 billion were up 18 percent on 11 percent higher volume and 7 percent higher prices despite the negative impact of currency in Q4. PTOI seasonal loss of ($92) million improved $24 million on higher volume in Latin America and stronger than expected pricing gains, partially offset by continued investment in commercial and R&D activities.

Full year segment PTOI increased 3 percent to $5.7 billion, excluding Pharmaceuticals and significant items. Agriculture PTOI increased 18 percent driven by volume and pricing growth for seed and crop protection businesses in North America and Latin America. Performance Chemicals PTOI decreased 16 percent from lower sales across the segment.


Free cash flow was $3.1 billion versus $3.3 billion in the prior year. 2012 includes a $0.5 billion contribution to the principal U.S. pension plan and lower net income, partly offset by improved working capital productivity.

Fixed cost and working capital productivity benefits were each about $400 million, surpassing their
$300 million targets.

Reflecting the change in reporting for the cost of non-operating pension and other post-employment benefits and excluding significant items, 2012 operating earnings were $3.77 per share. On the same basis, the 2013 outlook for operating earnings is $3.85 to $4.05 per share, an increase of 2 to 7 percent over the prior year.

"DuPont stands stronger today than it did a year ago. Our segments delivered innovation, productivity and integration cost synergies. This, coupled with a record year in new product introductions, has strengthened our market position," said DuPont Chair and CEO Ellen Kullman. "However, weakness in markets served by Performance Chemicals and Electronics & Communications provided significant challenges in 2012. We've adjusted our plans to meet the changing market environment and grow our businesses in a slow-growth world economy."

Fourth quarter 2012 sales were $7.3 billion, flat versus the prior year. Currency impact and portfolio changes offset 3 percent volume growth. Volume was driven by Agriculture, with robust sales in Latin America and a strong start to the North American selling season, and increases in Asia Pacific for Performance Materials, Electronics & Communications and Performance Chemicals. The table below shows fourth quarter regional sales and variances versus fourth quarter 2011.

Full-year 2012 sales were $34.8 billion, up 3 percent versus 2011, reflecting 4 percent higher local prices, 2 percent adverse currency impact, 2 percent lower volume, and a 3 percent net increase from portfolio changes. Local prices increased for all segments except Electronics & Communications which had lower pass-through of metals prices. Lower global volume principally reflects decreases for Performance Chemicals and Electronics & Communications, partly offset by higher Agriculture volumes. The table below shows regional sales and variances versus 2011.

Excluding significant items, fourth quarter 2012 income from continuing operations was $110 million versus $246 million in the prior year. The decrease principally reflects lower income from Performance Chemicals and Pharmaceuticals, increased spending for growth initiatives and adverse currency impact. Reported fourth quarter 2012 income from continuing operations was $19 million versus $293 million in the fourth quarter 2011.