SANDY SHORE AP Business Writer — November 4, 2009
A leaner DuPont chemical company is pushing hard into China and other developing countries and said Tuesday it is in position to outperform markets that have been rattled by the recession.
DuPont Co., based in Wilmington, Del., has seen its sales to big customers in the housing and automobile industry fall away, forcing the company to cut thousands of jobs and place a growing emphasis on its agricultural business, such as seed sales and materials used in advanced technologies like solar power.
Much of that activity will be outside of the U.S. and in places like Asia, Latin America and Eastern Europe.
Sales to emerging markets is expected to grow to $12 billion by the end of 2012, about 50 percent more than this year, DuPont said.
DuPont will deliver 20 percent compound annual earnings growth between now and 2012, said CEO Ellen Kullman at the company's annual investor day.
"We are well-positioned to outperform the rate at which markets recover and improve," Kullman said.
Chemical makers were badly beaten up last year when energy prices spiked and then the recession deepened, drastically cutting into revenues.
Over the past nine months, DuPont has pared costs by $900 million and last month reported third-quarter earnings of $409 million. It was the first time the company the company boosted year-over-year profits this year.
The recovery in the U.S. has varied widely by business, said company spokesman Anthony Farina.
That has made overseas sales, which now account for a third of sales, even more imperative.
Sales in China rose 7 percent over the past three months but fell in the United States, Europe, Africa and the Middle East.
DuPont said it would focus on agricultural sales and technology to reduce dependence on fossil fuels.
It predicted 2010 earnings in a range between $2.10 a share and $2.40 a share. Analysts are looking for something closer to the middle, at $2.21, according to a poll by Thomson Reuters.
The goals set out by DuPont appeared lofty to Edward Jones analyst Dan Ortwerth.
"I think that we need to be very cautious about the pace of recovery that they can actually achieve," Ortwerth said.
The company faces challenges in the U.S. automotive and housing markets as well as Western Europe, where the economic recovery trails the U.S., he said.
Shares of DuPont rose 28 cents to $32.55.
