EIDP, Inc. Quarterly Report for Q3 Ended Sep 30, 2008

Summary

EIDP, Inc. (CTA-PB) reported a 9% increase in net sales for the third quarter of 2008, reaching $7.3 billion, driven by higher selling prices and favorable currency exchange rates, particularly in its Agriculture & Nutrition segment and emerging markets. However, net income declined by 30% to $367 million due to significant headwinds. These included substantial raw material, energy, and transportation cost increases, along with an estimated $80 million in lost sales directly attributable to Hurricanes Ike and Gustav. The company recorded a pre-tax charge of $227 million for hurricane-related damages, cleanup, and restoration, and anticipates approximately $120 million in capital expenditures to replace damaged assets. Despite these challenges, the company is investing in future growth through increased spending on product development, capacity expansions, and its seed business. International sales showed strong growth, up 16%, with particular strength in Brazil and emerging markets in Eastern Europe, China, and India. The company continues to benefit from cost productivity improvements, though overall sales volume decreased by 4% globally, primarily due to weaker demand in the US and Western European markets for non-agriculture related products and the impact of the hurricanes. Management expects fourth quarter 2008 earnings to be between $0.20 and $0.25 per share, with an estimated $0.10 per share impact from ongoing hurricane-related disruptions.

Key Highlights

• 1Net sales increased by 9% to $7.3 billion in Q3 2008 compared to the prior year, driven by price increases and favorable currency, despite a 4% decrease in global sales volume.
• 2Net income decreased by 30% to $367 million in Q3 2008, largely due to a $227 million pre-tax charge for hurricane-related damages and increased costs for raw materials, energy, and transportation.
• 3Hurricanes Ike and Gustav caused an estimated $80 million in lost sales and significant damage, leading to an anticipated $120 million in capital expenditures for restoration.
• 4The Agriculture & Nutrition segment showed strong performance with a 22% sales increase and a significant improvement in pretax operating loss.
• 5International sales grew by 16%, highlighting strength in emerging markets (Eastern Europe, China, India) and Brazil.
• 6The company expects Q4 2008 earnings per share to be between $0.20 and $0.25, factoring in approximately $0.10 per share impact from continuing hurricane-related disruptions.
• 7Despite global capital market instability, the company believes its liquidity and access to capital markets are adequate, with $2.1 billion in cash, cash equivalents, and marketable securities.

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