Agriculture Momentum Keeps Delivering to the Big 6
20 April 2012 Agriculture delivered in a big way to DuPont’s first quarter, boosted by corn seed sales in North America and an early start to the European season, as well as a robust Safrinha season in Brazil.
The agriculture business posted a 16% rise in sales to $4.1 billion – accounting for 46% of the company’s total sales – with an 8% increase in both price and volume, and delivered an 18% increase in pre-tax operating profit. The upbeat results led the American chemical giant to reaffirm its full-year profit outlook.
Crop protection product sales for the quarter rose 7% to $929 million, with both volume and price gains. Insecticides were a source of particular strength as Rynaxypyr penetrates global markets, which is helping the company roll out its Cyazypyr products and Dermacor seed treatments.
The Wilmington, Delaware-based company is on track to launch Cyazypyr in Asia Pacific in the second half of 2012, and will also launch its Dermacor seed treatment in Mexico. “While the 2012 launches are small, the target is large, and we believe the franchise of insect control products derived from the same novel chemistry family will grow to $1 billion over the next few years,” James C. Borel, DuPont Vice President, said on a conference call.
For the second quarter for the Agriculture unit, DuPont sees sales growth in the mid-teens percent range with mid-single-digit earnings growth compared to the same period’s previous year.
It expects a strong finish to the North American and European planting seasons to lift its seed business.
“Crop Protection expects a very strong second quarter as farmers are incented to protect their crops and maximize their yield,” Borel added. However, input cost increases in the seed business and the negative impact of currency exchange rates partially offset the robust outlook.
Companywide, DuPont reported first-quarter earnings rose to $1.61 per share before significant items, compared with $1.52 per share in the same period a year earlier. Reported earnings edged up to $1.57 per share versus $1.52 per share a year ago. Sales of $11.2 billion represented a 12% increase from the prior year.
DuPont reaffirmed its full-year profit forecast range of $4.20 to $4.40 per share, up 7% to 12% from 2011, excluding items.
Source: DuPont; edited by Jaclyn Sindrich, Managing Editor
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