Published April 17, 2014
DuPont, which is making a big push into the agriculture market, reported a steeper-than-expected 3 percent fall in quarterly revenue as severe winter in North America delayed the planting of crops.
Sales in the agriculture business, DuPont's biggest, fell 6 percent, the first decline in ten quarters, due to lower demand for seeds and herbicides in North America and lower corn plantings in Brazil and North America.
"Impact of the weather pushed a lot of the agriculture demand out of the quarter and into the second quarter," SunTrust Robinson Humphrey analyst James Sheehan said.
Operating earnings fell 5 percent to $1.44 billion in the agriculture business.
DuPont, however, backed its full-year 2014 operating earnings of $4.20-$4.45 per share.
In the first quarter, operating earnings increased in five of DuPont's seven units, including industrial biosciences, nutrition & health and performance materials businesses.
As part of DuPont's strategy to move into less volatile businesses, the company is hiving off its performance chemicals unit, which has weighed on results since 2012 due to weak prices for a white pigment used in toothpastes, sunscreens and a host of other products.
Operating earnings in the business, which also makes materials used in non-stick cookware and refrigerants, fell 20 percent in the quarter.
Analysts have speculated that the sale of the unit was at the behest of Nelson Peltz, whose Trian Fund Management disclosed a stake in DuPont last year's summer.
Peltz called DuPont's stock undervalued but did not spelt out how he seeks to increase value. DuPont unveiled a $5 billion share repurchase program earlier this year.
A number of chemical companies including rival Dow Chemical Co have come under investor pressure to separate less stable businesses and raise shareholder returns.
Hedge fund titan Daniel Loeb's Third Point LLC has urged Dow Chemical to spin off its lucrative but slow-growing petrochemical unit and focus on specialty materials.
Smaller rival Chemtura Corp said on Thursday it would sell its agrichemicals business to rival Platform Specialty Products Corp for about $1 billion to focus on specialty chemicals.
Net income attributable to DuPont dropped to $1.44 billion, or $1.54 per share, in the quarter ended March 31, from $3.35 billion, or $3.58 per share, a year earlier.
Operating earnings were $1.58 per share, in line with analysts' estimates, according to Thomson Reuters I/B/E/S.
Revenue fell nearly 3 percent to $10.13 billion, missing market estimates of $10.45 billion.
The 57 percent fall in net income was attributable to the sale of DuPont's performance coating business, which added almost $2 billion to earnings in the year-earlier quarter.
DuPont sold the business, which supplies vehicle and industrial coating systems, to Carlyle Group in February.
Shares of DuPont, a Dow 30 component, closed at $67.72 on Wednesday on the New York Stock Exchange. They were down about 1 percent in premarket trading.