EI DuPont de Nemours & Co.’s (DD) announced that its seed business, Pioneer Hi-Bred, showed commendable early financial results through volume gains and price improvements for this season and is poised for strong growth in its global business in 2011.
The president of DuPont's Pioneer Hi-Bred seed business anticipates an increase in corn and soybean market share, coupled with mid single-digit price increases.
Last December, the company projected its Agriculture & Nutrition segment to grow its sales at a compounded annual growth rate of 8% to 10% from 2010 through 2015 and increase pre-tax operating margins in the range of 19% to 21% in the same time period for the seed, crop protection and nutrition and health businesses.
The company reiterated its outlook for the segment based on its relentless focus on innovation and ability to meet the needs of growers.
The launch of Optimum AcreMax 1 insect protection, the industry's first in-the-bag corn rootworm refuge solution coupled with a smooth integration of the PROaccess business is expected to contribute to strong results in 2011.
Optimum AcreMax 1 products have been planted on about 4 million acres this year, exceeding the company’s targets. DuPont intends to convert triple-stack products containing Herculex XTRA to AcreMax 1 products as managing refuge requirements for triple stacks is a huge challenge for farmers due to the in-field refuge requirement. The farmers have shown good response toward AcreMax 1.
The company’s seed businesses are also investing in powerful pipelines with innovations to meet its customers' needs and provide them more options. The company’s 29 new Pioneer soybean varieties for 2011, developed for specific grower needs and locations, is an example of the stream of innovations which will help deliver further growth for the soybean business in 2012 and beyond.
However, the company also announced that it is indefinitely delaying the commercial launch of the genetically-modified soybean seed at the center of a long-running court battle with archrival Monsanto Co. (MON). The seed, the launch of which has been delayed before, is controversial because DuPont is using a Monsanto gene in the soybean plant against the wishes of Monsanto.
DuPont is a science-based product and services company, ranking sixth in crop protection chemicals and second in seeds. The company continues to execute its strategy of enhancing its offshore reach, expanding its presence in newer chemical technologies and shoring up agricultural operations.
The company spent approximately $637 million for acquisitions, supporting its Agriculture and Safety and Protection Services businesses in 2010.
Net earnings of the chemical giant plunged 14.7% to $376 million or 40 cents per share in the fourth quarter of 2010 compared with $441 million or 48 cents per share in the prior-year period. Reported earnings, however, were ahead of the Zacks Consensus Estimate of 32 cents per share.
Quarterly revenues grew 15% to $7.4 billion on a 12% volume gain, driven by higher international sales and a 6% rise in selling prices. Sales exceeded the Zacks Consensus Estimate of $6.9 billion.
DuPont faces stiff competition from The Dow Chemical Company (DOW) and Ashland Inc.
Currently, DuPont has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term Outperform recommendation.
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