DuPont Trims 2011 Outlook - Analyst Blog

E. I. du Pont de Nemours and Company (DD) has slashed its full-year 2011 outlook citing slower growth in some of its businesses due to weakness in the company's end markets.

For 2011, DuPont forecasts earnings in the range of $3.87-$3.95, down from its earlier forecast of $3.97-$4.05. The company’s lowering of outlook reflects destocking in some industrial supply chains that has sped up in the current quarter, due to softening demand in consumer electronics and continued weakness in housing and construction markets.

As per the company, it is seeing slower growth in certain segments driven by global economic uncertainty, which contributed to the ongoing conservative cash management in some supply chains.

However, not all of DuPont’s businesses are suffering. As per the company, demand in its agriculture and food segment continues to be strong, due to solid volume growth during the current summer months in Latin America.

Recently, DuPont released its third-quarter results; reporting a net income of $452 million or 69 cents per share in the third quarter of 2011 from $367 million or 40 cents per share in the same quarter of 2010. The profit exceeded the Zacks Consensus Estimate of 56 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 32% to $9.2 billion, up from the Zacks Consensus Estimate of $8.9 billion. The increase in sales reflected a rise of 1% in sales volume, a hike of 15% in local price, 4% currency benefit and 12% net increase from portfolio changes. Sales in the developing markets rose 38%.

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).

The company currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. In addition, we reiterate our long-term Neutral recommendation on the stock

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