DUPONT REPORTS THIRD QUARTER 2004 EARNINGS
Summary
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Earnings Comparisons |
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3Q2004 |
3Q2003 |
9 Months |
9 Months |
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Reported Net Income |
$ .33 |
$ (.88) |
$ 1.49 |
$ .33 |
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Cumulative Effect of a Change in Accounting Principle |
- |
- |
- |
(.03) |
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Special Items* |
.08 |
(1.01) |
(.52) |
(1.01) |
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Earnings Before Special Items |
.25 |
.13 |
2.01 |
1.231.37 |
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* See Schedules A and B |
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"For the third consecutive quarter, DuPont has achieved strong growth in revenue, earnings and cash despite the sharp rise in energy and raw material costs," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer. "The employees of DuPont delivered solid results, and I am very pleased with the progress we are making."
Global Consolidated Net Sales and
Net Income
Consolidated net sales were $5.7 billion compared to $6.1 billion in third
quarter 2003. Net sales increased from 2 percent higher local selling prices, 6
percent higher volume, and 2 percent currency benefit. Portfolio changes,
principally the INVISTA divestiture, net of the consolidation of DuPont Dow Elastomers and the benefit of small acquisitions, reduced
net sales by 17 percent. As a result, net sales were down 7 percent.
Third quarter net income was $331 million, or $.33 per share, compared to a loss of $873 million, or ($.88) per share, in the third quarter of 2003. Operating income improvement was principally due to higher sales volumes and selling prices, partly offset by higher raw material costs.
Special items totaled a net after-tax benefit of $78 million, or $.08 per share in the third quarter 2004 versus a net after-tax charge of $1,008 million, or ($1.01) 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 $253 million compared to $135 million in the third quarter 2003.
Business Segment Performance
Pretax operating income (PTOI) before special items was $603 million, up 67
percent compared to third quarter 2003. Segment sales, which include transfers
and a pro rata share of equity affiliates, were $6.4 billion, up 10 percent
excluding portfolio changes. Segment sales increased from 4 percent higher U.S.
dollar selling prices and 6 percent higher volume. Portfolio changes reduced
sales by 18 percent, leaving third quarter segment sales 8 percent below last
year. The table below shows third quarter sales by region and variance analysis
versus the prior year:
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THIRD QUARTER 2004 |
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Segment Sales |
% Change Due To |
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3Q'04 |
% Change |
Local |
Currency |
Volume |
Portfolio Changes * |
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Worldwide |
6.4 |
(8) |
2 |
2 |
6 |
(18) |
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2.5 |
(18) |
3 |
0 |
0 |
(21) |
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1.8 |
(2) |
2 |
6 |
4 |
(14) |
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1.3 |
1 |
2 |
2 |
21 |
(24) |
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0.8 |
4 |
2 |
1 |
8 |
(7) |
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* Includes a reduction in Textiles & Interiors segment sales due to the INVISTA divestiture (April 30), the additional sales resulting from fully consolidating DuPont Dow Elastomers (DDE), and additional sales from acquisitions. |
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The table below presents year-over-year sales analysis for the five core segments of DuPont. This provides insight into the performance of DuPont, excluding INVISTA, which was divested in the second quarter.
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Segment Sales (a) |
Three Months Ended |
Percentage Change Due To |
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$ |
% Change |
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Volume |
Portfolio |
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Agriculture & Nutrition |
$969 |
21 % |
7 |
11 |
3 |
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Coatings & Color Technologies |
1,476 |
7 |
6 |
1 |
- |
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Electronic & Communication Technologies |
815 |
12 |
5 |
7 |
- |
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Performance Materials |
1,672 |
29 |
4 |
13 |
12 |
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Safety & Protection |
1,185 |
19 |
9 |
8 |
2 |
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Total Core Segments |
6,117 |
17 % |
6 |
7 |
4 |
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Textiles & Interiors(c) |
286 |
(84) |
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Other |
12 |
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Total |
$ 6,415 |
(8) % |
4 |
6 |
(18) |
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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
Outlook
The company has noted that leading global economic
indicators, especially those in industrial production, are showing signs of
slowing growth rates in response to the sharp increase in energy-related costs
during the third quarter. DuPont anticipates that these conditions will
continue for the remainder of the year. Despite this likely scenario and the
impact it may have on raw material costs and customer demand, the company is
reaffirming its previous full-year earnings outlook of $2.25 - $2.35 per share,
excluding the impact of special items listed in Schedule B.
"Our company is committed to executing our strategies. We are putting our science to work, going where growth is, and leveraging our ability to deliver superior shareholder value to our owners," Holliday said.
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 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.
More information about segment results
and highlights may be accessed on www.dupont.com via the "
Financial Schedule Attachments (In PDF Format, Adobe Acrobat Reader required) available by clicking here.
Full News Release above with Financial Schedule Attachments included is available in PDF Format by clicking here.
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10/26/04