8-KOther Events

EIDP, Inc. 8-K Report (Apr 29, 2003)

Filed April 29, 2003For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) reported strong first-quarter 2003 results, with earnings per share (EPS) before special items increasing 11% to $0.61, up from $0.55 in the prior year. This performance was driven by a significant 14% increase in consolidated net sales to $7 billion, attributed to a 7% volume increase and a 6% benefit from a weaker U.S. dollar. The company saw broad-based volume growth across its five growth platforms and Textiles & Interiors (DTI) segment, with Pharmaceuticals, Agriculture & Nutrition, and Safety & Protection delivering particularly strong results. Despite facing headwinds from higher pension, energy, and raw material costs, DuPont's operational execution remained robust. The company highlighted specific segment performance, noting solid growth in Agriculture & Nutrition and Safety & Protection, while Pharmaceuticals benefited from a wholesaler buy-in. The outlook for the second quarter indicates continued pressure from rising energy costs and pension expenses, but the company anticipates delivering first-half 2003 earnings in line with consensus estimates, driven by ongoing volume growth and price increases.

Key Highlights

  • 1First Quarter 2003 earnings per share (EPS) before special items increased 11% to $0.61, up from $0.55 in the prior year.
  • 2Consolidated net sales grew 14% to $7 billion, driven by 7% volume increase and 6% currency benefit from a weaker U.S. dollar.
  • 3Broad-based volume growth was observed across all segments and regions.
  • 4Pharmaceuticals segment showed significant After-Tax Operating Income (ATOI) growth of 86%, partly due to a wholesaler buy-in for Cozaar®/Hyzaar®.
  • 5Agriculture & Nutrition and Safety & Protection segments also reported strong sales and ATOI growth.
  • 6Coatings & Color Technologies and Performance Materials segments experienced declines in ATOI due to higher raw material costs.
  • 7The company anticipates second-quarter 2003 will face at least double the negative impact of higher energy-related raw material costs compared to the first quarter.

Frequently Asked Questions

The primary drivers for the 14% increase in consolidated net sales to $7 billion were a 7% rise in sales volume and a 6% benefit from the weaker U.S. dollar, which increased the value of international sales when converted to U.S. dollars.

Several segments showed strong growth, including Pharmaceuticals (86% ATOI increase), Agriculture & Nutrition (17% ATOI increase), and Safety & Protection (24% ATOI increase). However, Coatings & Color Technologies (-13% ATOI) and Performance Materials (-11% ATOI) saw declines due to higher raw material costs. The company also noted an increase in pension and energy costs impacting profitability across various segments.

DuPont expects continued headwinds from significantly higher energy-related raw material costs, with a negative impact at least double that seen in the first quarter. Additionally, higher non-cash pension expense is expected to reduce EPS by approximately 10 cents per quarter throughout 2003. Despite these challenges, the company anticipates delivering first-half 2003 earnings in line with current consensus estimates.

In the first quarter of 2003, special items consisted of a $78 million pretax charge ($51 million after-tax, or $0.05 per share) related to the settlement of the 1995 Benlate® shareholder litigation. In the prior year, special items included charges related to exiting joint ventures and a gain from a litigation settlement.