DUPONT REPORTS SECOND QUARTER 2004 EARNINGS
Summary
|
Earnings Comparisons |
|
|||
|
|
2Q2004 |
2Q2003 |
6 Months |
6 Months |
|
Reported Net Income |
$ .50 |
$ .67 |
$ 1.16 |
$ 1.21 |
|
Cumulative Effect of a Change in Accounting Principle |
- |
- |
- |
(.03) |
|
Special Items* |
(.30) |
.05 |
(.60) |
.01 |
|
Earnings Before Special Items |
.80 |
.62 |
1.76 |
1.23 |
|
*See Schedules A and B |
|
|
||
"For the second consecutive quarter, the five DuPont growth platforms delivered strong growth in revenue, earnings, and cash despite high energy and raw material prices," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer. "During the second quarter, we also completed the sale of our Textiles & Interiors business and executed the major phase of our previously announced $900 million cost improvement program. I am proud of the results that our people have delivered on all fronts."
Global Consolidated Net Sales
and Net Income
Consolidated net sales totaled $7.5 billion compared to $7.4 billion in second
quarter 2003, up 2 percent. The benefit to sales from 4 percent higher U.S.
dollar selling prices and 6 percent higher sales volume offset a substantial
sales reduction resulting from portfolio changes (the INVISTA divestiture, net
of the consolidation of DuPont Dow Elastomers).
Second quarter net income was $503 million, or $.50 per share, compared to $675 million, or $.67 per share, in the second quarter of 2003. The decrease in income principally reflects current period restructuring costs, partly offset by increases in operating income. Operating income improvement was principally due to higher sales volumes and selling prices, as well as increased Pharmaceuticals earnings.
Special items totaled an after-tax charge of $302 million, or $.30 per share in the second quarter 2004 versus a net after-tax benefit of $52 million, or $.05 per share, last year, as summarized in Schedule B and further detailed in the notes to the financial statements.
Net income before special items was $805 million, up 29 percent. This compares to $623 million in the second quarter 2003.
Business Segment Performance
Segment sales, which include transfers and a pro rata share of equity
affiliates, were $8.2 billion in the second quarter, down 1 percent versus
prior year. The table below shows second quarter sales by region and variance
analysis versus the prior year:
|
SECOND QUARTER 2004 |
||||||
|
|
Segment Sales |
% Change Due To |
||||
|
|
2Q'04 |
% Change |
Local |
Currency |
Volume |
Portfolio Changes * |
|
Worldwide |
8.2 |
(1) |
1 |
3 |
5 |
(10) |
|
|
3.7 |
(4) |
2 |
0 |
4 |
(10) |
|
|
2.4 |
2 |
1 |
8 |
1 |
(8) |
|
|
1.3 |
4 |
0 |
3 |
15 |
(14) |
|
|
0.8 |
(1) |
(5) |
1 |
12 |
(9) |
|
* Includes changes in sales related to the INVISTA divestiture and the impact of fully consolidating DuPont Dow Elastomers (DDE) beginning in the second quarter 2004. |
||||||
The table below presents year-over-year sales analysis for the five core segments of DuPont. This provides insight into the performance of DuPont, ex-INVISTA.
|
|
|||||
|
Segment Sales (a) |
Three Months Ended |
Percentage Change Due To |
|||
|
|
$ |
% Change |
|
Volume |
Other(b) |
|
Agriculture & Nutrition |
$2,077 |
10 |
5 |
5 |
- |
|
Coatings & Color Technologies |
1,560 |
10 |
6 |
4 |
- |
|
Electronic & Communication Technologies |
845 |
15 |
1 |
14 |
- |
|
Performance Materials |
1,703 |
26 |
4 |
10 |
12 |
|
Safety & Protection |
1,168 |
10 |
3 |
7 |
- |
|
|
|
|
|
|
|
|
Total Core Segments |
7,353 |
14 % |
4 |
7 |
3 |
|
|
|
|
|
|
|
|
Textiles & Interiors(c) |
826 |
(54) |
|
|
|
|
Other |
13 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ 8,192 |
(1) % |
4 |
5 |
(10) |
|
(a) Includes transfers and pro rata share of equity
affiliate sales. |
|||||
Segment pretax operating income (PTOI) grew 23 percent, before
special items which are summarized in Schedule B. This growth reflected a
strong Northern Hemisphere agricultural season, significant growth in Asia, and
continued strong demand from
Detailed information on segment performance is provided in
schedules C, D, and E which show sales variance analyses, segment PTOI as
reported, and segment PTOI excluding the impact of special items. The company
encourages investors to review these schedules. Additional segment information
is available in the earnings data section of the
Other Items
The company closed the sale of INVISTA on April 30.
After-tax proceeds from the sale were $4.1 billion, including debt assumed by
the buyer of roundly $270 million.
Outlook
The company has increased its full year earnings per
share outlook. The updated full year outlook is $2.25 to $2.35 per share,
compared to the previous outlook of $2.10 to $2.30 per share. (Both outlooks exclude first and second quarter special items
referenced above and discussed in the notes to Schedule A.) This outlook
assumes that industrial production growth rates will continue to be strong,
though somewhat moderated from the rates experienced in the first half of 2004;
oil and natural gas prices will remain at or slightly below their currently
high levels; and currency will continue to provide a modest benefit.
"Across our company, the people of DuPont are focused on meeting our growth objectives. We are putting our science to work to serve our customers, and we are continuously improving our productivity," said Holliday. "Our financial outlook reflects our confidence in the success of these actions."
Use of Non-GAAP Measures
Management believes that earnings before special items, a
"non-GAAP" measure, is meaningful to investors because it
provides insight with respect to ongoing operating results of the company.
Special items represent significant charges or credits that are important to an
understanding of the company's ongoing operations. 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. A
reconciliation of non-GAAP measures to GAAP is provided in Schedule G.
DuPont is a science company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for the people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture, nutrition, electronics, communications, safety and protection, home and construction, transportation and protective 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.
Financial Schedule Attachments (In PDF Format, Adobe Acrobat Reader required) available here.
The full release with schedules included in PDF format is available here.
# # #
07/27/04