This News Release is also available in Dutch, French, German, Italian and Spanish
Highlights
-- Fourth quarter 2007 earnings were $.60 per share, compared to fourth quarter 2006 earnings of $.94 per share. Excluding significant items, earnings per share increased 27 percent to $.57 per share from $.45 per share in the prior-year quarter (see Schedule B for a listing of significant items.)
-- Sales increased 11 percent to $7.0 billion, reflecting 3 percent volume growth, 3 percent higher local selling prices, 4 percent currency benefit and a 1 percent net benefit related to portfolio and other changes.
-- Sales in emerging markets grew 20 percent, led by Brazil, China and India. Sales in the United States grew 5 percent despite lower U.S. housing starts and auto builds.
-- Local selling price gains more than offset higher ingredient costs.
-- Fixed costs as a percentage of sales improved 210 basis points from the prior-year quarter.
-- Fourth quarter 2007 segment pre-tax operating income (PTOI) increased 30 percent to $937 million, excluding significant items. Segment PTOI margin on the same basis improved 210 basis points.
-- Full year 2007 earnings were $3.22 per share versus $3.38 in 2006. Excluding significant items, 2007 earnings increased 14 percent to $3.28 per share from $2.88 in the prior year.
“DuPont’s strong earnings growth in the fourth quarter reflects our global presence and the breadth of our product offerings,” said Charles O. Holliday, Jr., DuPont chairman and chief executive officer. “We delivered 14 percent earnings per share growth for the year despite weakness in certain U.S. markets and higher ingredient costs.”
Global Consolidated Sales
Consolidated net sales increased 11 percent to $7.0 billion in the fourth quarter. Outside the United States, sales increased 14 percent, boosted by 20 percent growth in emerging markets, particularly Brazil, China and India.
Net Income and Earnings Per Share
Net income for the fourth quarter 2007 was $545 million, or $.60 per share, including a net benefit of $23 million, or $.03 per share, for significant items. Fourth quarter 2006 net income was $871 million, or $.94 per share, including a net benefit of $449 million, or $.49 per share, for significant items. See attached Schedule B for a listing of significant items in both periods.
These results are higher than the outlook issued by the company on January 9, largely due to finalization of the company’s tax rate and higher business performance.
Business Segment Performance
Segment PTOI for the fourth quarter 2007 was $804 million versus $576 million in the fourth quarter 2006. Excluding significant items, segment PTOI increased 30 percent from $721 million to $937 million.
The following are business segment highlights, excluding significant items, comparing fourth quarter 2007 results to fourth quarter 2006.
Agriculture & Nutrition
-- Fourth quarter sales increased $237 million to $1.3 billion with strong sales growth in all regions. Brazil delivered record revenue and earnings growth this selling season, which was driven by robust demand for Pioneer(R) brand seed with superior yield, advantaged market channel capabilities and market share gains.
-- A seasonal PTOI loss of $89 million reflected an improvement of $59 million versus the prior-year quarter. Earnings gains were driven by strong sales, improved margins, and cost productivity improvements, moderated by planned growth investments. 2007 PTOI includes a gain of $15 million relating to the divestiture of certain crop chemical assets.
Coatings & Color Technologies
-- Sales increased to $1.7 billion. Broad-based sales increases outside the United States, which were driven primarily by higher USD selling prices, offset continued weakness in North American auto and housing markets.
-- PTOI increased 5 percent to $216 million, compared to $205 million in the prior-year quarter. Earnings grew substantially in coatings which reflected fixed cost reductions and higher sales. This increase was partially offset by the absence of a gain on the sale of assets in the prior year and modest earnings declines in titanium dioxide.
Electronic & Communication Technologies
-- Sales grew to $1.0 billion, reflecting higher volumes, particularly in Latin America and Asia, and higher USD selling prices. Price improvements in North America increased revenue in the region compared to the prior-year quarter.
-- PTOI increased to $156 million, including a $28 million gain from an asset sale. Excluding the gain, PTOI increased 14 percent, reflecting higher volumes in imaging and fluoroproducts and fixed cost productivity.
Performance Materials
-- Sales grew to $1.7 billion primarily due to higher USD selling prices. Volume growth in Latin America, Asia and Europe was more than offset by lower demand in North America.
-- PTOI grew to $186 million, reflecting strong sales across all product lines, currency benefits and fixed cost productivity. 2007 PTOI includes a $16 million charge for a manufacturing asset write-down.
Safety & Protection
-- Sales grew to $1.4 billion, reflecting higher USD selling prices and volume growth in the surfaces, Kevlar(R) and Nomex(R) product lines.
-- PTOI grew to $277 million, reflecting the segment’s diverse products and markets, which offset weakness in the U.S. housing market.
Additional information on segment performance is available on the DuPont Investor Center website at www.dupont.com.
Outlook
The company today reaffirmed its 2008 full-year earnings outlook of $3.35 to $3.55 per share announced on January 9. For the first quarter 2008, the company expects to earn $1.12 to $1.17 per share. In the first quarter 2007, the company earned $1.07 per share, excluding a $.06 significant item charge.
In a letter to shareholders posted today, Holliday highlighted the company’s recent improvements in profitability, return on capital and productivity. Holliday also outlined how the company plans to achieve higher profitability in 2008 and beyond by making advances in agriculture, safety and protection, emerging markets and cost productivity. The letter is available at www.dupont.com.
“We are confident we can deliver attractive growth in earnings in 2008, and see even stronger growth in the years to follow – continuing our improvement of the last three years,” Holliday said.
The company announced that it will host an investors meeting March 14 at 9 a.m. (EST) in New York City. Details for the meeting are available on the DuPont Investor Center website at www.dupont.com.
Use of Non-GAAP Measures
Management believes that measures of income excluding significant items ("non-GAAP" information) are meaningful to investors because they provide insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in Schedule D.
DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
Forward-Looking Statements: This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; seasonality of sales of agricultural products; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations.
