EI DuPont de Nemours & Co. (DD) has been sued by members of a Michigan polo and golf club, alleging the company’s Imprelis herbicide is causing unintended damage to trees.
Imprelis is the brand name of a herbicide sold by DuPont Professional Products, a division of DuPont De Nemours & Company. Introduced to the market in 2010, DuPont claims Imprelis is "effective against a very wide spectrum of important turfgrass weeds." Many landscapers and professional gardeners switched to Imprelis to control weeds in turf such as dandelions as Imprelis was claimed to be safer for the environment than predecessors such as 2,4-D Dichlorophenoxyacetic acid (known as 2,4-D).
However, the complaints are coming from the property owners that the spraying of Imprelis on their lawns has damaged and led to the death of trees, including white pine and Norway spruce trees. Substantial tree damage has been reported throughout the Midwest, in East Coast states, and as far south as Georgia.
DuPont is trying to investigate reports of unfavorable symptoms observed on certain tree species and is confident the lawsuit would be unfounded.
On July 15, 2011, DuPont declared a third quarter common stock dividend of 41 cents per share, payable on September 12 to stockholders of record as of August 15.
The company’s businesses are delivering strong results and are building on the momentum from 2010 and first-quarter 2011. The company reported an increase in profit of $1.43 billion or $1.52 per share in the first quarter of 2011 from $1.13 billion or $1.24 per share in the same quarter of 2010. The profit exceeded the Zacks Consensus Estimate by $0.15 per share.
The improvement in profit is attributable to higher sales in the developing markets and strong volumes, especially in the Safety & Protection, Agriculture & Nutrition and Electronics & Communications segments.
The company focuses on innovation and productivity and is on track to achieve fixed cost productivity and working capital productivity gains of $1 billion and is also on track to deliver its 2011 targets of $300 million each.
Sales in the quarter grew 18% to $10.0 billion, up from the Zacks Consensus Estimate of $9.3 billion. The increase in sales reflected a 9% rise in sales volume, an increase of 8% in local price and 1% net increase from portfolio changes. Sales in the developing markets rose 30%.
DuPont expects its resource investments, coupled with innovative product offerings and market demands aligned with the megatrends, to enrich the company's mix of high-growth, high-value offerings. Based on current expectations for long-term sales growth, the company forecasts high-growth business segments to shift from 48% of the portfolio in 2010 to 57% by 2015.
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.
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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