Shares of DuPont, a Dow 30 component, were down about 1 percent
at $67.19 in late morning trading on the New York Stock Exchange
DuPont said it expected "modest" growth in sales and
"significant" growth in operating earnings in its agriculture
business in the current quarter.
Sales in the agriculture business, DuPont's biggest, fell 6
percent, the first decline in 10 quarters, as farmers put off
purchases due to a colder-than-usual winter.
"Impact of the weather pushed a lot of the agriculture demand
out of the quarter and into the second quarter," SunTrust
Robinson Humphrey analyst James Sheehan said.
DuPont's operating earnings fell 5 percent to $1.44 billion in
the agriculture business.
Farmers' plans to sow more soybean than corn this year is also
hurting DuPont as corn is more profitable for the company and
corn plantings need more pesticides.
DuPont said lower-than-expected corn plantings in Brazil, North
America and Ukraine would likely hurt its farm unit in the first
half of the year.
However, Chief Executive Ellen Kullman told reporters on a call
that the company's "growth fundamentals in agriculture continue
to be excellent both in the United States and on a global
DuPont reaffirmed its 2014 operating earnings forecast of
$4.20-$4.45 per share.
"I think the theme is an ongoing recovery in most of DuPont's
end markets, lean corporate management, and new products and
solutions driving sales," said Eric Linser of Avant-Garde
Advisors, a wealth management firm that owns DuPont shares.
First-quarter operating earnings rose in five of DuPont's seven
units, including in industrial biosciences, nutrition and health
and performance materials businesses.
As part of a strategy to move into less volatile businesses, the
company is hiving off its performance chemicals unit, which has
weighed on results since 2012 due to weak prices for a white
pigment used in toothpastes, sunscreens and other products.
Operating earnings in the business, which also makes materials
used in non-stick cookware and refrigerants, fell 20 percent in
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Analysts speculate that the planned sale of DuPont's performance
chemicals unit was at the behest of Nelson Peltz, whose Trian
Fund Management disclosed a stake in the company last year.
Peltz called DuPont's stock undervalued, but did not spell out how
he seeks to increase value. DuPont unveiled a $5 billion share
repurchase program earlier this year.
A number of chemical companies, including Dow Chemical Co <DOW.N>,
have come under investor pressure to separate less stable
businesses and raise shareholder returns.
Hedge fund titan Daniel Loeb's Third Point LLC has urged Dow
Chemical to spin off its lucrative but slow-growing
petrochemical units and focus on specialty materials.
Smaller rival Chemtura Corp <CHMT.N> said on Thursday that it
would sell its agrichemicals business to Platform Specialty
Products Corp <PAH.N> for about $1 billion to focus on specialty
Net income attributable to DuPont dropped to $1.44 billion, or
$1.54 per share, in the first quarter ended March 31, from $3.35
billion, or $3.58 per share, a year earlier.
DuPont's net income plunged as the company sold its performance
coating business, which added almost $2 billion to earnings in
the year-earlier quarter, to Carlyle Group <CG.O> in February.
Operating earnings were $1.58 per share, in line with analysts'
estimates, according to Thomson Reuters I/B/E/S.
Revenue fell nearly 3 percent to $10.13 billion, missing the
average analyst estimate of $10.45 billion.
(Editing by Don Sebastian and Kirti Pandey)
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