8-KOther Events

EIDP, Inc. 8-K Report (Jan 28, 2003)

Filed January 28, 2003For Securities:CTA-PBCTA-PA

Summary

E.I. du Pont de Nemours and Company (DuPont) reported its fourth quarter and full-year 2002 earnings. The fourth quarter showed a significant improvement in earnings per share before special items, rising to $0.34 from $0.12 in the prior year. This was driven by a 7 percent increase in segment sales, primarily due to higher worldwide volumes, while prices remained flat. Net income in the fourth quarter was $350 million, a stark contrast to the $3,915 million in the prior year which included a substantial gain from the sale of DuPont Pharmaceuticals. For the full year 2002, earnings per share before special items were $2.00, up from $1.19 in 2001. However, consolidated sales for the full year decreased by 3 percent to $24.0 billion, and the company reported a net loss of $1,103 million, or $1.11 per share, primarily due to a $2.94 billion charge for a change in accounting principle related to goodwill impairment. Despite the reported net loss for the year, the operational performance, as indicated by earnings before special items, demonstrated a positive trend, with notable strength in segments like Agriculture & Nutrition, Performance Materials, and Safety & Protection.

Key Highlights

  • 1DuPont's fourth quarter 2002 earnings before special items significantly increased to $0.34 per share, up from $0.12 in the prior year.
  • 2Segment sales for Q4 2002 grew by 7%, driven by a 7% increase in worldwide volumes, with flat U.S. dollar prices.
  • 3Full-year 2002 earnings per share before special items were $2.00, an improvement from $1.19 in 2001.
  • 4The company reported a net loss of $1,103 million ($1.11 per share) for the full year 2002, largely due to a $2.94 billion charge for goodwill impairment from adopting SFAS No. 142.
  • 5The sale of DuPont Pharmaceuticals in Q4 2001 significantly impacted prior year net income, contributing $3,817 million to that period's results.
  • 6Several business segments showed positive performance in Q4 2002, including Agriculture & Nutrition (revenue up 8%), Coatings & Color Technologies (revenue up 7%), and Safety & Protection (revenue up 12%).
  • 7The company forecasts a negative impact of $0.34 to $0.39 per share on 2003 earnings due to pension and other postretirement expenses.

Frequently Asked Questions

The primary driver for the much higher net income in Q4 2001 was a substantial after-tax gain of $3,817 million from the sale of DuPont Pharmaceuticals to Bristol-Myers Squibb. This one-time gain is not present in the Q4 2002 results.

The full-year net loss of $1,103 million was largely due to a significant charge of $2,944 million recorded on January 1, 2002, related to the cumulative effect of adopting SFAS No. 142, which required the impairment of goodwill. This accounting charge, while impacting reported net income, does not reflect the operational performance of the business segments.

Several segments showed positive revenue growth in Q4 2002. Agriculture & Nutrition sales increased by 8%, Coatings & Color Technologies by 7%, and Safety & Protection by 12%. Performance Materials and Textiles & Interiors also saw sales increases of 7% and 5%, respectively.

DuPont expects first-quarter 2003 earnings per share to be roughly similar to the prior year, before special items. Key factors influencing the 2003 outlook include an estimated negative impact of $0.34 to $0.39 per share from non-cash pension and other postretirement expenses, and an improved estimated full-year base income tax rate of 30% due to various initiatives.