10-QPeriod: Q3 FY2007

EIDP, Inc. Quarterly Report for Q3 Ended Sep 30, 2007

Filed October 31, 2007For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) reported a 6% increase in net sales for the third quarter of 2007, reaching $6.7 billion, compared to the same period in the prior year. This growth was driven by a combination of a 2% increase in local selling prices, a 2% favorable currency exchange impact, and a 2% increase in volume, with significant growth observed outside the United States. Net income for the quarter was $526 million, or $0.56 per share, an increase from $485 million, or $0.52 per share, in the prior year. This improvement was primarily attributed to higher selling prices, increased Cozaar®/Hyzaar® income, and a weaker U.S. dollar, partially offset by higher raw material and energy costs, and investments in growth, particularly in the Agriculture & Nutrition segment. The company also updated its full-year 2007 earnings per share outlook to a range of $3.06 to $3.11.

Key Highlights

  • 1Net sales increased by 6% to $6.7 billion in Q3 2007, driven by price increases, favorable currency exchange, and volume growth.
  • 2Net income rose by 8% to $526 million ($0.56 per share) in Q3 2007, compared to $485 million ($0.52 per share) in Q3 2006.
  • 3Sales growth was stronger outside the U.S. (11%), with the Agriculture & Nutrition segment seeing a 25% increase in non-U.S. sales.
  • 4The company updated its full-year 2007 EPS guidance to a range of $3.06 to $3.11.
  • 5Significant investments in research and development continue, particularly in the Agriculture & Nutrition segment, to drive future growth.
  • 6The company experienced a notable increase in cash provided by operating activities, rising from $763 million to $1,426 million year-to-date.
  • 7The company announced an 11% increase in its fourth-quarter common stock dividend to $0.41 per share.

Frequently Asked Questions

Revenue growth was primarily driven by a 2% increase in local selling prices, a 2% favorable currency exchange impact, and a 2% increase in sales volume. Profit growth was supported by these revenue increases, higher Cozaar®/Hyzaar® income, and a weaker U.S. dollar, although partially offset by increased raw material and energy costs and growth investments.

The Agriculture & Nutrition segment showed strong performance with a 21% increase in third-quarter sales, driven by higher corn seed sales and crop chemical prices. Despite a loss in the quarter, the PTOI (Pre-Tax Operating Income) loss improved significantly compared to the prior year, benefiting from increased sales and restructuring gains, though impacted by higher fixed costs and investments.

The company updated its full-year 2007 EPS outlook to a range of $3.06 to $3.11. For 2008, DuPont anticipates strong revenue growth, particularly in emerging markets, and significant earnings growth in its Agriculture & Nutrition segment, benefiting from new product introductions and productivity gains, though tempered by potential U.S. market softness and ingredient cost uncertainties.

The company is involved in several significant legal and environmental matters, including ongoing litigation related to Benlate®, PFOA (perfluorooctanoic acid) contamination, and antitrust investigations. While the company accrues for probable liabilities, the ultimate outcomes and potential financial impact can be uncertain and are detailed within the filing. The PFOA situation, in particular, involves regulatory scrutiny and potential environmental remediation and litigation costs.