DuPont’ s quarterly revenue missed Wall Street expectations as a sharp drop in demand, especially for solar and electronic materials, offset higher prices.
While the fourth quarter is traditionally slow for the chemical industry, DuPont said many of its customers chose to draw down existing inventories rather than stock up, which pushed volume down 10 per cent.
Sales rose in every region, but only due to a 14-per-cent jump in pricing. Strong demand from farmers and other agricultural customers – the one bright spot during the quarter – helped earnings narrowly beat Wall Street’s expectations.
“The global economy’s taking a bit of a time out here,” said Ticonderoga Securities analyst Mark Gulley.
DuPont chief executive officer Ellen Kullman, looking to assuage concerns of a slowdown, said in a statement that the company remained “well-positioned to serve customers and innovate as key markets rebound and global population growth drives new opportunities.”
On Tuesday, Ms. Kullman did not change DuPont’s 2012 earnings target of $4.20 (U.S.) to $4.40 a share, which is mostly above the $4.26 expected on Wall Street.
For the fourth quarter, the company posted net income of $373-million, or 40 cents a share, compared with $376-million, or 40 cents a share, a year earlier.
Excluding a $100-million charge to settle claims that a DuPont herbicide was killing trees, as well as other one-time items, the company earned 35 cents a share.
By that measure, analysts expected a profit of 33 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 14 per cent to $8.43-billion. Analysts expected $8.53-billion. The last time DuPont’s revenue missed Wall Street’s expectations was the third quarter of 2009.
Sales of pesticides and genetically modified seeds to farmers ahead of the North American spring planting season helped push agricultural revenue up 8 per cent to $1.3-billion.
To offset higher metal costs, DuPont raised prices on some electronics by 15 per cent in the fourth quarter. That pushed sales of parts to solar panel and consumer electronic producers down 18 per cent to $630-million.
Best Buy Co., the world’s largest consumer electronics chain, said earlier this month that its same-store sales fell 1.2 per cent in December.
DuPont’s agricultural products should continue to sell well, with other products catching up in the third and fourth quarters, said Mr. Gulley, the Ticonderoga Securities analyst.
“I think their more economically sensitive areas will recover later this year,” he said.
Last month, Ms. Kullman told investors that food and nutrition sales would increasingly bring in a larger chunk of the chemical maker’s revenue.
The U.S. Environmental Protection Agency ordered DuPont to stop selling its Imprelis herbicide last August, after thousands of customers complained that the product was killing certain evergreen tree species.
Shares of Wilmington, Del.-based DuPont were down 0.1 per cent at $49.29 in pre-market trading.