DuPont Shares Rally on Improved Profitability and Earnings Growth

Strategic Insights -

DuPont, a leading chemicals and life-sciences group, reported improved profitability in the second quarter and expressed optimism about continued earnings growth. The company's shares rallied sharply, gaining nearly 2% to $73.7/16, close to recent highs. DuPont's second-quarter earnings per share from continuing operations were 78 cents, surpassing analysts' estimates of 73 cents. Earnings from continuing operations rose to $886m, from $839m in the same period a year ago.

Key Takeaways:

  • DuPont's second-quarter earnings per share from continuing operations were 78 cents, beating analysts' estimates of 73 cents.
  • Earnings from continuing operations rose to $886m, an increase of $47m from the same period a year ago.
  • The company's shares gained nearly 2% to $73.7/16, close to recent highs.
  • DuPont is optimistic about continued earnings growth, despite sluggish economic conditions in Europe and South America and rising raw material costs.
  • The company is streamlining operations, consolidating manufacturing, and cutting staff in order to improve profitability.
  • Asian sales rose 16% on 20% volume growth, reflecting stronger performance across most business units.
  • The company's pharmaceuticals business proved the strongest performer for the quarter, with a 96% increase in earnings due to strong contributions from Sustiva and Cozaar.

Statistics:

  • Second-quarter earnings per share from continuing operations: 78 cents
  • Earnings from continuing operations: $886m
  • Increase in earnings from the same period a year ago: $47m
  • DuPont's shares: gained nearly 2% to $73.7/16
  • Asian sales: rose 16% on 20% volume growth
  • Volume decline excluding acquisitions: about 1%
  • Price decline: 3%
  • European sales: rose 20%
  • Volume growth in Europe: 24%
  • Net income: $114m
  • Earnings per share: 18 cents
  • Sales: $6.33bn
  • Increase in sales: 12%

Sources:

  • [1] "DuPont shares rally as earnings rise," Financial Times, August 1999
  • [2] "Conoco suffers from weak refining margins in spite of e&p benefits," Houston oil company reports 28% decline in net income, Financial Times, August 1999