10-QPeriod: Q2 FY2010

EIDP, Inc. Quarterly Report for Q2 Ended Jun 30, 2010

Filed July 27, 2010For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) reported a strong financial performance for the quarter and six months ended June 30, 2010, showing significant year-over-year improvements. Net sales increased by 26% for the quarter and 25% year-to-date, driven by volume growth across all segments, particularly in emerging markets, and supported by a 5% and 4% increase in local selling prices respectively. Net income attributable to DuPont surged to $1.16 billion for the quarter ($0.42 billion in Q2 2009) and $2.29 billion year-to-date ($0.91 billion in H1 2009), reflecting robust operational execution and the absence of significant prior-year restructuring charges. The company has raised its full-year 2010 earnings outlook to $3.00-$3.15 per share, signaling confidence in continued growth driven by strong sales, improving mid-cycle businesses, and ongoing productivity initiatives. DuPont's strategic focus on emerging markets and new product development for agriculture, photovoltaics, and alternative energy appears to be paying off, positioning the company well for future growth despite ongoing global economic uncertainties.

Financial Highlights

49 data points
Beta

Revenue

$8.62B

Net Income

$1.17B

13.6% Net Margin

EPS (Diluted)

$1.26

Total Assets

$37.71B

Cash & Equivalents

$2.21B

Free Cash Flow

$326.00M

Financial Statements
Beta
Revenue$8.62B
R&D Expenses$404.00M
SG&A Expenses$1.02B
Operating Expenses$7.51B
Operating Income$1.66B
Interest Expense$103.00M
Net Income$1.17B
EPS (Basic)$1.27
EPS (Diluted)$1.26
Shares Outstanding (Basic)907.10M
Shares Outstanding (Diluted)914.55M

Key Highlights

  • 1Significant increase in net sales for both the quarter (+26%) and six months (+25%) ended June 30, 2010, driven by volume and price increases.
  • 2Net income attributable to DuPont saw substantial growth, rising to $1.16 billion in Q2 2010 from $0.42 billion in Q2 2009, and $2.29 billion year-to-date from $0.91 billion in H1 2009.
  • 3Full-year 2010 earnings outlook raised to $3.00-$3.15 per share, indicating strong management confidence.
  • 4Emerging markets are a key growth driver, with sales increasing 32% and representing 28% of total company sales.
  • 5Segments like Electronics & Communications, Performance Chemicals, Performance Materials, and Safety & Protection showed strong performance, with significant sales and income improvements, often benefiting from the absence of prior-year restructuring charges.
  • 6The company's liquidity remains strong with $4.0 billion in cash and cash equivalents and marketable securities, and access to approximately $2.5 billion in unused credit lines.
  • 7Free cash flow was negative for the first six months ($924 million outflow), but the company expects full-year free cash flow to exceed $1.7 billion.

Frequently Asked Questions

DuPont experienced a significant improvement in its financial performance. For the second quarter of 2010, net sales increased by 26% to $8.6 billion, and net income attributable to DuPont grew substantially to $1.16 billion, compared to $0.42 billion in the same period of 2009. For the first six months of 2010, net sales rose by 25% to $17.1 billion, and net income attributable to DuPont increased to $2.29 billion from $0.91 billion in the first half of 2009. This growth was driven by higher sales volumes, increased selling prices, and the absence of significant restructuring charges recorded in the prior year.

DuPont maintains a strong liquidity position, with $4.0 billion in cash and cash equivalents and marketable securities as of June 30, 2010. Additionally, the company has access to approximately $2.5 billion in unused credit lines. While the first six months of 2010 showed a negative free cash flow due to working capital increases and capital expenditures, management expects full-year free cash flow to exceed $1.7 billion. The company prioritizes maintaining a strong balance sheet and returning excess cash to shareholders, while also considering strategic investment opportunities.

The primary drivers for DuPont's improved sales and earnings include a significant increase in sales volume across all segments, particularly in emerging markets where sales grew by 32% and now represent 28% of total sales. Higher local selling prices also contributed to revenue growth. The absence of significant restructuring and asset-related charges, which impacted the prior year's results, also positively affected earnings. The company is also benefiting from global economic recovery and market share gains in specific product lines.

DuPont has raised its full-year 2010 earnings per share outlook to a range of $3.00 to $3.15, up from the previous range of $2.50 to $2.70. This upward revision is supported by strong second-quarter results, anticipated continued year-over-year gains from higher sales, strengthening mid-cycle businesses, and ongoing productivity improvements. The company expects full-year free cash flow to be greater than $1.7 billion.