Dupont Reports Q1 Earnings: Earnings And Sales Are Up
Press release from the issuing company
WILMINGTON, Del., April 29, 2003 -- First quarter 2003 earnings, before special items and cumulative effect of changes in accounting principles, were $.61 per share compared with first quarter 2002 earnings of $.55, up 11 percent.
First quarter 2003 income before cumulative effect of changes in accounting principles was $564 million, or $.56 per share, compared with $479 million, or $.48 per share, for the first quarter 2002.
Consolidated net sales for the first quarter were $7 billion, up 14 percent, driven by a 7 percent volume increase and a 6 percent benefit from the currency effect of a weaker U.S. dollar.
"Our sales growth in the first quarter reflects strong volume increases in each of our five growth platforms and DuPont Textiles & Interiors (DTI). This broad-based volume growth, combined with particularly strong results in Pharmaceuticals, Agriculture & Nutrition and Safety & Protection, offset the impact of higher pension, energy, and raw material costs in the first quarter," said Charles O. Holliday, Jr., chairman and CEO. "Our businesses performed well, maintaining their momentum even better than expected through the end of the quarter."
Global Consolidated Sales and Net Income
Consolidated net sales totaled $7 billion compared to $6.1 billion in first quarter 2002, up 14 percent. This includes 7 percent higher sales volume, a 2 percent benefit attributable to the net impact of acquired and divested businesses, and a 6 percent benefit from the weaker dollar, partly offset by 1 percent lower local selling prices.
First quarter net income was $535 million, compared to a loss of $2,465 million in the first quarter of 2002. Income before cumulative effect of changes in accounting principles was $564 million in the current quarter versus $479 million in the first quarter 2002, up 18 percent. The increase in income principally reflects higher sales volumes, the benefit of a weaker U.S. dollar and lower income taxes, partly offset by increases in raw material costs and pension expense.
Although the company currently expects the global economic recovery to resume its moderate pace later in 2003, the near-term economic outlook is somewhat restrained – particularly for industrial production in developed economies. In addition, for the second quarter 2003 versus the prior year:
The company expects significantly higher energy related raw material costs. The year over year negative impact in the second quarter is expected to be at least double what it was in the first quarter of 2003.
As previously announced, the company will incur higher non-cash expense in 2003, mainly related to pension. This will negatively affect earnings per share versus the prior year by approximately 10 cents per quarter throughout 2003.
Despite these challenges, the company expects its businesses to continue to perform well in the market place, driving both volume growth and price increases. Taking all of these factors into account, the company expects to deliver earnings per share for the first half of 2003 that are in line with the current First Call earnings estimate consensus of $1.16 (which excludes the impact of DuPont's first quarter special item and cumulative effect of a change in accounting principle), yielding a second quarter earnings outlook in the mid- to high 50 cents per share range. This outlook does not reflect any special items in the second quarter.
"Our leadership fully understands the near term challenges – slower economic growth and higher costs," said Holliday. "Our businesses are focused on what they can control, keeping a tight rein on cash costs and driving sales and volume growth by staying close to the customer. I am confident that we will continue to outperform our competition."
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