US chemical giant EI DuPont de Nemours & Co. (DD) announced that its Pioneer Hi-Bred business is expected to post sales growth in 2011.
Higher futures prices for commodities, including soybeans and corn, are helping drive sales.
The corn price on U.S. commodities markets has risen about 15% in 2011 as corn is in short supply globally. Soybean prices have fallen about 1.4% because the stockpiles are more comfortable.
While 2011 has been a challenging growing season, Pioneer runs excellent supply chain management processes and expects full availability for the 2012 planting season.
In addition, the recent approval of new products, Optimum AcreMax and Optimum AcreMax Xtra, expands the company's offerings of new insect protection solutions to benefit U.S. corn growers and continue to deliver value. Pioneer continues to replace existing technologies with new solutions to drive net pricing gains and better performance.
Pioneer Hi-Bred's global seed sales rose 17% at a compound annual growth rate between 2007 and 2010.
As announced in December 2010, DuPont still continues to expect to deliver sales at a compounded annual growth rate of 8% to 10% from 2010-15 and increase pre-tax operating margins in the range of 19% to 21% from 2010 through 2015 for the Agriculture & Nutrition reporting segment, which included the seed, crop protection and nutrition and health businesses.
In July 2011, DuPont released its second quarter 2011 results. DuPont reported an increase in profit of $1.22 billion or $1.37 per share in the second quarter of 2011 versus $1.16 billion or $1.17 per share in the same quarter of 2010. The profit exceeded the Zacks Consensus Estimate by 4 cents per share. The improvement in profit was attributable to higher selling prices, increased sales volume and currency benefit, partly offset by higher raw material, energy and freight costs.
Sales in the quarter grew 19% to $10.3 billion, up from the Zacks Consensus Estimate of $9.95 billion. The increase in sales reflected a rise of 2% in sales volume, an increase of 11% in local price, a 3% currency benefit and a 3% net increase from portfolio changes. Sales in the developing markets rose 29%.
DuPont had cash and cash equivalents of $2.3 billion as of June 30, 2011 compared with $4.3 billion as of December 31, 2010. Long-term borrowings and capital lease obligations amounted to $12.5 billion as of June 30, 2011 versus $10.1 billion as of December 31, 2010.
As of June 30, 2011, DuPont had a net cash flow of $644 million from operating activities versus $424 million as of June 30, 2010. Meanwhile, capital expenditures increased to $741 million from $500 million in the year-ago period.
DuPont upgraded its full-year 2011 earnings outlook to $3.90–$4.05 per share from its previous forecast of $3.65–$3.85. This revision was attributable to the company’s strong earnings results, the expectation for continued global economic growth and about 5 cents per share full-year operating earnings from Danisco.
The company's estimate for the impact of the Danisco acquisition on full-year reported earnings is at present a reduction of 18 cents to 29 cents per share, versus the previous estimate of 30 cents to 45 cents per share. The current view is based on anticipated full-year Danisco operating earnings of about 5 cents per share and significant item charges related to the acquisition estimated to be 23 cents to 34 cents per share.
In addition to these Danisco charges, the company expects a 3-cent per share significant item charge in the third quarter associated with a licensing agreement.
DuPont is a global chemical and life sciences company, employing more than 60,000 people worldwide with a diverse array of product offerings. With over 21,000 patents and 15,000 patent applications worldwide, DuPont sells its products in diverse markets, such as transportation, construction, apparel, agriculture, nutrition and health, packaging and electronics markets.
DuPont faces stiff competition from BASF SE (BASFY) and The Dow Chemical Company (DOW).
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