Wilmington, DE, Apr. 29--DuPont Co. posted a first quarter profit, but warned that second quarter profits would miss Wall Street forecasts.
DuPont said the near term outlook was "somewhat restrained" by slack industrial demand, noting that the chemicals business has not fully recovered from a long slump.
For the first quarter, DuPont reported net income of $535 million, or $0.53 a share, compared with a net loss of $2.47 billion, or $2.46 a share, a year earlier.
DuPont, which is in talks to sell its $6 billion a year textiles business, said revenue rose to $7.19 billion from $6.10 billion, driven by a 7% volume increase on higher sales of pharmaceuticals, agricultural and nutritional products. It was also helped by the effect of a weaker U.S. dollar, which means that overseas earnings are worth more when converted into dollars.
"Seven percent volume growth is very good," said James Halloran, a money manager with National City Wealth Management. He noted the increase was the same as DuPont's biggest rival, Dow Chemical Co.
"There's a chance for some decent turnaround if this can be sustained," Halloran said.
Before the accounting change and costs for a legal settlement, the company earned $0.61 a share, beating Wall Street's consensus estimate of $0.54 a share, according to research firm Thomson First Call.
But despite those better than expected results, DuPont warned that near term results would remain crimped by energy costs. It said second quarter profit would be in the mid 50 cents a share range, well short of Wall Street analysts' consensus estimate of $0.63 a share, according to First Call.
The negative impact of energy costs in the second quarter is expected to be at least double the level in the first quarter, DuPont said.
Halloran cautioned that some of the strong first quarter sales growth in agriculture and pharmaceuticals could take away from business going forward.
In the agriculture business, "a lot of sales got made early in the (planting) season. There's perhaps a little bit of borrowing in the agricultural business from the second quarter," he said.
Customers also stocked up on pharmaceuticals in the first three months of the year, a potential hit to second-quarter results, he said.
DuPont also said that higher non-cash expenses, mostly from pensions, would lower results by $0.10 a share per quarter throughout 2003.
