EI DuPont de Nemours & Co.’s (DD) Pioneer agricultural unit received approval from Environmental Protection Agency (EPA) to sell its Optimum AcreMax Xtra insect protection as part of its "refuge-in-a-bag" offering for corn farmers.
DuPont plans to charge a premium for the product, though specific pricing will depend on geography as the company tailors its seed offerings to farmers based on location.
The product is scheduled to launch in the 2012 growing season. It will help farmers to combat the above-ground pests, rather than rival products, which fight above- and below-ground pests.
The Optimum AcreMax product line includes a refuge crop in the bag for farmers, simplifying the planting process.
Earlier, the Environmental Protection Agency (EPA) had ordered DuPont to stop selling its weed-killer Imprelis after the chemical reportedly killed a large number of trees. DuPont voluntarily suspended Imprelis sales on August 4 and announced a product recall and refund for customers.
Similarly, DuPont was sued by members of a Michigan polo and golf club, alleging that the company’s Imprelis herbicide is causing unintended damage to trees.
Imprelis is the brand name of an 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."
On July 28, 2011, DuPont reported an increase in profit of $1.22 billion or $1.37 per share in the second quarter of 2011 from $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, 3% currency benefit and 3% net increase from portfolio changes. Sales in the developing markets rose 29%.
DuPont upgraded its full-year 2011 earnings outlook to $3.90–$4.05 per share from its previous forecast of $3.65–$3.85 per share. This revision was attributable to the company’s strong earnings results, the expectation for continued global economic growth and about $.05 per share full-year operating earnings from Danisco on an underlying basis.
DuPont is a science-based product and services company, ranked 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 BASF SE and The Dow Chemical Company (DOW).
The company currently retains a Zacks #2 Rank on its stock, which translates into short-term Buy rating. In addition, we reiterate our Outperform recommendation on the stock for the long term.
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