WILMINGTON, Del.,  July 29, 2003  —   :


  • Reported second quarter 2003 earnings per share were $.67 compared to $.54 in the prior year.
  • Consolidated net sales were $7.4 billion, up 10 percent over the prior year.
  • Before special items, second quarter earnings were $.62 per share, exceeding the company's outlook for the quarter. Earnings per share before special items in the second quarter of 2002 were $.71.
  • The Agriculture & Nutrition and Safety & Protection segments delivered strong double-digit revenue and earnings growth for both the second quarter and the first half of 2003. This strong performance, together with a lower effective tax rate across all segments, helped mitigate the effects of significantly higher raw material costs in DuPont Textiles & Interiors (DTI) and Performance Materials.

Earnings Comparisons*
($ per share diluted)




6 Months

6 Months




YTD 2003

YTD 2002






Special Items





Before Special Items





* Excludes cumulative effect of changes in accounting principles of $(.03) first quarter and year-to-date 2003 and $(2.94) first quarter and year-to-date 2002.

"Our businesses are performing well in a difficult economy. We continue to drive top line growth while controlling costs, improving productivity and investing for the future," said DuPont Chairman and Chief Executive Officer Charles O. Holliday, Jr. "Our operating discipline is helping to offset significant increases in the cost of energy and raw materials."

Global Consolidated Net Sales and Net Income
Consolidated net sales totaled $7.4 billion compared to $6.7 billion in second quarter 2002, up 10 percent. This includes a 1 percent benefit from higher local selling prices, a 5 percent benefit from currency and 4 percent growth from the net impact of acquired and divested businesses.

Second quarter net income was $675 million, or $.67 per share, compared to $543 million, or $.54 per share, in the second quarter of 2002. The increase in income principally reflects the absence of prior-year restructuring and facilities shut-down costs.

Special items, which are described in the notes accompanying the financial statements, totaled an after-tax benefit of $52 million, or $.05 per share, in the second quarter 2003 versus a net after-tax charge of $168 million, or $.17 per share, last year, as shown in the table below:



$MM Pretax

$MM After-Tax

($ Per Share)








1st Quarter – Total







2nd Quarter







  Ag & Nutr. – The Solae Company Non-op. Gains







  Textiles & Interiors – Unifi Settlement







  Gain on Canadian Currency Contract







  Minority Interest Redemption







  Textiles & Interiors – Restructuring







  Ag & Nutr. – Facility Shutdown / Product Exit







  Litigation – Discontinued Vitamin Business







  Early Extinguishment of Debt







  Net Tax Settlements







  Pharmaceuticals Gain Adjustment







2nd Quarter – Total







Income before special items was $623 million, or $.62 per share, versus $711 million, or $.71 per share, in the second quarter 2002. Significantly higher raw material costs and non-cash pension expense were partly offset by benefits from lower taxes, currency, and reductions in other fixed costs.

Segment Sales
Worldwide and regional segment sales and related variances for the second quarter 2003 compared with the second quarter 2002 are summarized below. Segment sales include transfers and a pro rata share of equity affiliate sales.


Segment Sales

% Change Due To



% Change
vs. 2Q'02


























   Asia Pacific







Canada, Mexico,
South America







* Net impact of acquisitions and divestitures and a change in management reporting for DTI intersegment transfers.

  • Worldwide volumes were flat overall but increased in four of the six operating segments.
  • Acquisitions (included in "other") added 3 percent to worldwide top line growth.
  • Local selling prices improved versus prior year, the first year-over-year gain since second quarter 2001.

Business Segment Performance
Comments on individual segment sales and after-tax operating income (ATOI) for the second quarter 2003 compared with the second quarter 2002 are summarized below. All segments had a benefit to sales ranging from 4-7 percent resulting from the currency effect of the weaker dollar. Additional segment information is available to investors and the public via the earnings data section of the DuPont Investors section on

Agriculture & Nutrition – The segment delivered record sales and earnings for the first half of 2003. Second quarter sales of $1.9 billion were 21 percent higher reflecting 5 percent higher U.S. dollar selling prices, 7 percent higher volume, and a 9 percent benefit attributable to additional sales from the acquisition of Liqui-Box and from The Solae Company, a newly formed venture with Bunge Limited. ATOI was $382 million versus $232 million, up 65 percent. The second quarter 2002 included an after-tax charge of $54 million for special items, while second quarter 2003 includes a $41 million gain on the formation of The Solae Company. Operating results reflect higher sales, particularly of production agriculture products, and a lower effective tax rate, which more than offset the negative impact of higher non-cash pension expense.

Coatings & Color Technologies – Sales of $1.4 billion were up 8 percent principally reflecting 10 percent higher U.S. dollar selling prices partly offset by lower volume. ATOI declined 3 percent to $132 million, as higher local prices and a lower effective tax rate essentially offset higher non-cash pension expense.

Electronic & Communication Technologies – Sales of $0.7 billion were up 8 percent, reflecting acquisition-related sales growth and higher volumes and prices. ATOI was $39 million versus $57 million last year. Earnings declined as higher raw material costs in fluoroproducts, start-up costs for Display Technologies, and non-cash pension expense more than offset the benefits of higher revenue and a lower effective tax rate.

Performance Materials – Sales of $1.4 billion were up 5 percent due to 3 percent higher volume, 3 percent higher U.S. dollar selling prices, and a 1 percent reduction due to the divestiture of the DuPont™ Clysar® shrink film business. ATOI of $73 million was down 41 percent due to significantly higher raw material and non-cash pension costs.

Pharmaceuticals – ATOI was $54 million versus $72 million last year. Last year's second quarter included a $12 million benefit to reflect final settlement with Bristol-Myers Squibb in connection with the sale of DuPont Pharmaceuticals.

Safety & Protection – Sales of $1.1 billion were up 19 percent due to 2 percent higher volumes, 10 percent higher U.S. dollar selling prices, and acquisitions. ATOI grew 18 percent to $140 million reflecting increased revenue and a lower effective tax rate. Higher earnings from nonwoven and aramid products more than offset higher non-cash pension expense.

Textiles & Interiors (DTI) – Sales were $1.8 billion. Excluding the impact of the change in management reporting for intersegment transfers, sales were down 2 percent. This reflects 6 percent lower volume partly offset by 4 percent higher U.S. dollar selling prices. ATOI was $17 million versus a loss of $50 million last year. Setting aside special items, ATOI was $7 million versus $93 million last year. This reflects significantly higher raw material and non-cash pension costs, partly offset by reductions in cash fixed costs.

Other Items
In preparation for the planned separation of DTI, the company:

  • Successfully completed the tender offer for the shares of DuPont Canada not already owned by DuPont. The value of the transaction is approximately $1.1 billion, to be paid in two stages in the second and third quarters.
  • Redeemed Minority Interest Structures of $2 billion. The impact on the balance sheet will be a reduction of Minority Interest and a corresponding increase in debt.
  • Purchased manufacturing assets in synthetic leases for $80 million.

In addition, to take advantage of the current interest rate environment, the company plans to refinance additional assets in synthetic leases and accounts receivable securitizations, amounting to approximately $700 million in the third quarter.

Earnings Outlook
DuPont expects its businesses to continue to perform well in the marketplace, as reflected by market share, product mix and pricing. The businesses will continue to manage cash fixed costs to mitigate the impact of higher raw material and non-cash pension expense. The company also anticipates continued higher U.S. dollar pricing and some level of improved end-market demand in the second half versus the prior year.

As discussed in earlier outlooks, the company will incur higher non-cash pension and stock option expense versus the prior year. On an earnings per share basis, this is a negative impact of approximately $0.40 per share, spread evenly across the quarters. The company now expects its cost of goods to reflect high energy and related raw material costs for the remainder of 2003. On an earnings per share basis, the company estimates the year-over-year impact of higher variable costs to be approximately $0.60 for the year, $0.28 of which has already occurred. And the company now estimates that its full-year base income tax rate will be about 27.5 percent. This compares to 24.2 percent in 2002.

From a regional perspective, DuPont expects to return to double-digit year-over-year volume growth in Asia in the second half of 2003. There is less confidence in the precise timing and pace of improvement in U.S. industrial production – and this is a key factor in forecasting the company's revenues and earnings. Recent month-to-month results for DuPont businesses do not yet signal a clear inflection point in U.S. demand for manufactured goods. This uncertainty is also reflected in the wide range of current First Call 2003 full-year earnings estimates for DuPont ($1.60 – $2.10).

However, leading economic indicators have begun to trend positively, providing some optimism for resumed growth of U.S. industrial production in the second half of 2003. If such growth does not occur until late in the second half, the company maintains a bias toward the lower end of the current First Call range. If growth in U.S. industrial production is early and robust, the company sees upside toward the middle of the First Call range.

DuPont is a science company. Founded in 1802, DuPont puts science to work by solving problems and creating solutions that make people's lives better, safer and easier. Operating in more than 70 countries, the company offers a wide range of products and services to markets including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation and apparel.

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; and seasonality of sales of agricultural products.



More information about segment results and highlights may be accessed on via the "Investor Center" web page.


Consolidated Income Statement, Consolidate Segment Information and Financial Summary Attachments (In PDF Format, Adobe Acrobat Reader required) available by clicking here.


Full News Release above with Consolidated Income Statement, Consolidate Segment Information and Financial Summary Attachments included is available in PDF Format by clicking here.

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