Wilmington, DL, Jan. 27--DuPont provided an encouraging outlook for its business this year when it reported Tuesday a higher fourth-quarter profit that was boosted by a one-time gain on the sale of its synthetic-fiber unit.
DuPont reported fourth-quarter net income of $636 million, or 63 cents a share, up from $350 million, or 35 cents a share, in the year-earlier period.
The higher profit was related to the sale of Invista, the maker of the Lycra, Stainmaster, Coolmax and Thermolite brands.
Excluding one-time items, Dupont earned 29 cents a share, compared with 34 cents in the same period last year.
The results beat Wall Street's consensus estimate of 25 cents a share, according to Thomson First Call.
Shares of Dupont fell 50 cents to $42.58. The stock, a component of the Dow industrials, hit a 52-week high of $46.17 on Jan. 2.
Consolidated net sales for the quarter rose 14 percent to $6.5 billion, ahead of analysts forecast of $6.2 billion. DuPont reported double-digit growth across all six of its operating segments.
Leading the way was DuPont's agricultural and nutrition business, which had sales of $991 million, up 33 percent. Its electronics and communication business had sales of $750 million, up 18 percent.
Higher energy costs continue to eat into DuPont's profit. In the quarter, raw-material costs reduced after-tax earnings by $230 million, or 23 cents per share, compared with the same period last year.
DuPont does not expect any relief this year. It warned that raw-material costs would be at or slightly above 2003 levels.
Still, DuPont is more cheerful that a cyclical recovery in major industrial economies will benefit its business this year, saying its fourth quarter revenue growth should spill into this year.
"Indeed, we believe that 2004 may provide the best global economic improvement we've seen in several years," DuPont Chief Executive Charles Holliday said in a statement.
In the first quarter of 2004, DuPont is projecting earnings of 65 to 75 cents a share. For the full year, the company is estimating a range of $2 to $2.20 per share.
DuPont cautioned that its outlook is based on sustained increases in oil and natural gas as well as a planned $900 million cost-cutting initiative targeted for completion in 2005.
"Energy costs continue to be a major headwind, but if Dupont's cost reduction program has some teeth, Dupont could surprise to the upside in the second half of this year and into 2005," Janney Montgomery Scott analyst Jeffrey Peck said in a note. He has a "hold" on the stock.
This month DuPont realigned its management team in an effort to increase its sales by $1 billion a year.
