Crop protection high commodity prices supported demand globally, and growth was led by strong demand for fungicides in Europe, insecticide volumes globally and favorable currency exchange rates.
- Earnings were up substantially with pricing gains, volume growth and solid fixed cost productivity gains, all driving increased margins in pre-tax earnings.
- First half sulfonylurea herbicides sales were just over $600 million, that''s up 17% from last year, with more than half of the sales in new blends.
- Rynaxpyr sales were off to a strong start in 2008.
Pioneer sales were $1.4 billion, up 21% from last year, driven by both volume and pricing.
- Seed earnings were down with growth investments in higher commodity costs offsetting the earnings benefit of revenue growth. Without the $52 million mark-to-market charge pre-tax operating income would have been up double digits, including growth investments for the future.
- Total trait sales in corn were about 90%. Soybean acreage and volumes were up as was price. Margin percentages were lower primarily reflecting the rapid run-up in commodity prices.
- The company announced with the Y series soybean launch that the company will deliver a step-change improvement in soybean yields and unprecedented volumes for the 2009 growing season.
0- The entire line is demonstrated a 5% yield advantage against key competitive varieties, with some of the Y series varieties yielding 6% to 10% better yields than competitors. These products will deliver to customers, could be realized on up to 9 million acres next year.
Outside North America, seed sales grew 23% and the company closed out the first half up 38%.
The key driver was corn market share gain in Europe, with new share in competitive high value markets.
- For the remainder of this year, the company expects double-digit top-line growth at attractive gross margins.
- The company will not have the $25 million gain disclosed in the third quarter last year, from a contract termination payment.
Coatings & Color Technologies segment sales increased 10% and earnings increased 9%.
- Platform margins were essentially flat with last year, through good cost control, pricing gains, favorable currency and successful sales efforts.
- Titanium dioxide sales were up, on flat global volumes and improved U.S. dollar price. Volumes in North America were weak for architectural paint, but importantly, the company achieved a third quarter of sequential price increase, as well as achieved a price increase versus the prior year quarter.
- Sales grew outside of North America driven by strong demand, particularly in Latin America and higher U.S. dollar prices. Due to these actions and aggressive cost controls, earnings grew, despite the weak domestic markets and higher raw material and transportation costs.
- For Coatings & Color technologies, the company expects second half sales and earnings growth based on the favorable impact of pricing actions, continued growth in emerging markets and cost control efforts, mitigating continued weakness in North American markets.
- From a product perspective, TiO2 business is operating at high utilization rates, as end users seek a reliable supply source. The company expects coatings growth will be tampered by continued weak OEM markets.
Electronic & Communication Technologies sales grew 10% to $1.1 billion on higher prices and continued market strength.
- Earnings were $170 million, compared to $176 million last year. 2007 PTOI included a one-time $25 million pre-tax inventory valuation benefit. Excluding this item, PTOI increased 13%, reflecting strong sales and good cost discipline.
- Photovoltaic markets were especially strong along with continued demand in Asia for electronic components, partially offset by weakness in U.S. automotive electronics.
- For the second half, the company expects sales growth, with continued strength in photovoltaics, printed packaging and refrigeration, coupled with seasonally strong demand in the second half for electronics, but tampered by a potential slowdown in consumer discretionary spending. The company expects earnings growth, excluding $28 million from landfill in the fourth quarter of 2007.
Performance Materials sales grew 8% to $1.8 billion on stronger price, currency benefits and growth in Asia. Earnings declined 2% to $223 million.
- This platform faced some of the largest increases in raw material costs in the company this quarter and was able to offset them with pricing gains and benefits from currency.
- Volume declined 5% reflecting scheduled production outages and some softening in developed markets. The earnings declined reflects lower volume and currency-related fixed cost inflation.
- For the second half, expectation is for continued increases in ingredient and energy costs, and continued softening in developed markets. Sales are expected to increase, driven by pricing actions. Earnings would be flat to down on the lower volumes and a weaker regional sales mix.
Safety & Protection segment sales increased to $1.6 billion, up 8%.
- Pricing actions, particularly in chemicals, along with volume growth in emerging markets, more than offset the moderate volume declines in North America.
- Earnings were $302 million, down 5% from the prior year quarter, and PTOI margin was 19.1% lower than last year. The segment earnings and margin decline reflect a change in business mix versus last year. Earnings growth in the chemicals business was more than offset by the housing impact on volumes, less favorable product mix in Nomex, Kevlar, higher raw material costs and growth investments.
- All businesses posted sales increases with the exception of surfaces product lines. From a regional perspective, the businesses delivered higher local prices and double-digit volume growth in Latin America and Asia.
- North American volumes were down. The outlook for second half anticipates sales growth and moderate earnings growth. The half will benefit from 25% Nomex capacity expansion coming online in the later part of the third quarter, contract awards in Nomex and Kevlar, continued mix enrichment in chemicals business as well as pricing actions associated with the recent raw material increases.
- Earnings will be tampered by continued negative comparable store sales in the housing market, higher raw materials and Kevlar expansion-related growth investments.
Applied BioSciences technology platform
- DuPont has two major initiatives: one in cellulosic ethanol and one in biobutanol.
- In the area of biomaterials, the company is nearing completion of expansion plans for Sorona Polymer for Asia and the U.S. and is on schedule for initial Sorona commercial capacity this year.
- Sorona product continues to gain momentum in a variety of applications, for example, with major apparel brands and retailers.
- In the area of biospecialties, Omega-3 project has moved into the pilot plant phase.
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