This News Release is also available in: French, Dutch, German, Italian and Spanish
Highlights:
• DuPont’s second quarter earnings were $.46 per share including a net $.15 per share charge for significant items. Excluding significant items, earnings were $.61 per share.
• Fixed cost reduction and productivity actions benefited second quarter pre-tax earnings by about $335 million, bringing year-to-date cost reduction to about $600 million -- more than halfway toward achieving the full year goal of $1 billion.
• Raw material, energy and freight costs adjusted for currency and volume were 5 percent lower versus 2008, providing about $225 million benefit in the quarter. Results were in-line with company expectations and supported an outlook of about 4 to 6 percent lower variable costs for the full year.
• Agriculture & Nutrition segment’s second quarter earnings increased 15 percent to a record $580 million, driven by a 21 percent increase in seed sales, reflecting price increases and North America share gains.
• Combined sales volumes of Coatings & Color Technologies, Electronic & Communication Technologies, Performance Materials and Safety & Protection segments were 25 percent below second quarter 2008, but showed solid increases from the first quarter 2009 beyond the normal seasonal run-up.
“Our aggressive actions to improve productivity and reduce costs across the company are paying off as we contend with continued weak demand in key segments," said DuPont CEO Ellen J. Kullman. "Strong performance by our Agriculture & Nutrition segment combined with positive earnings contributions from all other business segments resulted in a solid second quarter given the continuing impact of the global recession. We will continue to rigorously apply the financial discipline and operational excellence needed during one of the most challenging economic periods ever seen."
Net Income and Global Consolidated Sales
Net income attributable to DuPont for the second quarter 2009 was $417 million versus $1,078 million in the prior year. The decline in net income principally reflects significantly lower sales volume, current quarter restructuring charges, and adverse currency impact. Consolidated net sales in the second quarter of $6.9 billion were 22 percent lower than prior year, principally reflecting 19 percent lower volume and a net 1 percent reduction due to portfolio changes. Local prices were 3 percent higher, largely driven by higher seed prices, but were more than offset by a 5 percent negative impact from currency exchange rates. Lower sales volume reflects the recessionary impact across global markets served by DuPont.
2009 Cost Reduction and Productivity Progress
As previously announced, DuPont has expanded actions to address global market conditions and further enhance its long-term competitiveness, which include higher 2009 targets for cost and capital reductions. Below is a progress summary of the company’s actions.
• Restructuring and productivity programs yielded a second quarter benefit of $335 million. This brings year-to-date cost reduction to about $600 million versus the company’s 2009 fixed cost reduction goal of $1 billion.
• Year-to-date capital expenditures were about $700 million versus the company’s full year target of $1.4 billion.
• First half seasonal working capital build was 40 percent less than 2008. This reflects a $1 billion inventory reduction versus June 2008, with about one-third attributed to productivity and projects directed at inventory management.
• For the year, $1 billion of working capital reduction projects have been identified and the company expects to deliver the $1 billion improvement over 2008 as previously announced.
Outlook
The company reaffirmed its 2009 earnings outlook range of $1.70 to $2.10 per share, excluding significant items. The outlook anticipates prevailing weak demand across key markets other than agriculture with gradual improvement from current recessionary levels during the remainder of 2009. Favorable conditions are expected in southern hemisphere agriculture markets with the benefit of increased market share for new products and related higher selling prices. The full-year free cash flow outlook remains $2.5 billion. The company will continue aggressive actions to reduce costs and capital expenditures, in addition to maintaining an appropriate level of investment for high-growth, high-margin businesses including seed products and photovoltaics.
“Most markets remain dynamic and challenging, but the actions we are taking position DuPont well for the eventual economic recovery, with a strong balance sheet, established global reach and science-based products and services that meet customers' evolving needs,” Kullman said.
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. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
# # #
