Chemical giant DuPont EI De Nemours & Co. (DD) reported fourth quarter 2009 earnings of 48 cents as opposed to a fourth quarter loss of 70 cents a year ago. Excluding non-recurring charges, DuPont earned 44 cents, beating the Zacks Consensus Estimate of 41 cents. Earnings were helped by significant cost cuts and lower raw material, energy and freight expenses.
Full-year 2009 earnings were $1.92 per share versus $2.20 in 2008. Excluding non-recurring charges, 2009 earnings were $2.03 per share versus $2.78 in the prior year.
Cost cuts have boosted DuPont’s fourth-quarter pre-tax earnings by about $294 million, which helped the company exceed its full-year cost reduction goal of $1 billion. Raw material, energy and freight costs were 20% lower than the previous-year levels.
However, revenues in the quarter were up 10% year over year to $6.4 billion, reflecting 10% higher volume and 3% lower local prices. Sales grew over 20% for titanium dioxide, electronic materials, performance polymers and seed products. Asia-Pacific sales exceeded pre-recession levels with volume up 34% from last year, reflecting very strong demand in China, Japan, Korea and India.
Sales in the Agriculture & Nutrition segment were up 12% to 1.4 billion, driven by a 9% increase in volumes and a 3% rise in prices. Segment volumes reflect 25% higher seed volume. Seed sales were $465 million. Crop protection product volumes increased 5%, reflecting increased insecticide demand in Latin America.
Sales in the Electronics & Communications segment were up 22% year over year to $582 million. Sales reflect 13% higher volumes and 9% higher prices. Seasonal demand, growth in photovoltaics and a small amount of inventory rebuilding throughout the industry contributed to a strong quarter. Operating profit of $61 million was up $32 million primarily due to significantly improved volume and mix.
Sales in the Performance Chemicals segment increased 9% to $1.3 billion. The sales increase was led by 17% higher volumes, partly offset by lower prices. Volume increases were primarily driven by a recovery in the titanium dioxide market in all regions. Operating profit of $208 million was an improvement of $194 million. The increase primarily reflected lower raw material costs and higher volume.
Sales in the Performance Coatings segment increased 8% to $975 million on higher selling prices. Volumes were 2% lower, reflecting continued industrial market weakness in developed regions, partly offset by higher demand in automotive OEM markets. Operating income of $70 million was up $151 million, reflecting lower raw material costs and aggressive fixed cost reductions.
Performance Materials sales of $1.4 billion increased 20%, principally reflecting 24% higher volumes led by an improvement in automotive, industrial, consumer and electrical markets, with strong volume recovery in all regions, particularly the Asia-Pacific. Segment operating profit for the quarter was $174 million, an improvement of $303 million, reflecting strong volume and variable margin expansion as lower selling prices were more than offset by the benefits of sharply lower raw material costs.
Safety & Protection sales of $759 million posted a decline of 9% year over year — essentially all volume driven. Sales in automotive and consumer markets rebounded, while industrial and law enforcement markets continued to lag. Operating profit of $135 million was an improvement of $48 million. The increase primarily reflected lower raw material costs and fixed cost reductions, partly offset by a lower volume.
DuPont reported full-year free cash flow of $3.4 billion. The company has increased its full-year 2010 earnings guidance to a range of $2.15 to $2.45 per share from its previous guidance of $2.10 to $2.40 per share. The company expects compound annual growth of 10% for top-line and 20% for earnings through 2012. The company also expects pension expenses to be about 10 cents per share, lower than originally anticipated.
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