Spiking demand for food, paint and electronics will push DuPont's earnings and revenue higher through 2015, the chemical maker said Thursday, with its chief executive promising the company's diverse portfolio has yet to reach its potential.
The lackluster outlook for 2011 excited few on Wall Street, where analysts have come to expect stellar results from the maker of Tyvek wrap for home construction and Kevlar, which is used in bulletproof vests.
Its shares fell 1.8 percent to $47.97 in late morning New York Stock Exchange trading.
"DuPont's guidance is in-line with consensus, but could be conservative as this management team has been more conservative than past teams," Monness, Crespi, Hardt & Co. analyst Christopher Shaw said. "But the flip side is that DuPont has over-delivered in the past year."
DuPont forecast earnings of $3.30 to $3.60 per share next year. Analysts expect $3.45 a share, according to Thomson Reuters I/B/E/S.
"Investors should expect consistent growth from us," CEO Ellen Kullman said. "Our portfolio has yet to hit its full potential."
In a presentation to investors at the company-owned hotel attached to its Wilmington, Delaware, headquarters, DuPont forecast 2011 revenue of $33 billion to $34 billion. Analysts expect $33.42 billion.
DuPont also affirmed its 2010 earnings guidance of $3.10 per share. The company earned $2.03 per share in 2009.
Agricultural unit sales should grow 8 percent to 10 percent through 2015, and sales in electronics should increase 10 percent to 12 percent, Kullman said.
DuPont said it may use its available cash for acquisitions in 2011, including in the agricultural and safety industries.
It said it is evaluating a "significant expansion" of its titanium dioxide business. Global capacity to make the material, which is used in automobile paint, is extremely tight. Key DuPont competitors in making titanium dioxide include Huntsman Corp and Tronox.
For 2011, DuPont expects energy and transportation costs to rise 3 percent and a tax rate of about 22 percent, Chief Financial Officer Nick Fanandakis said.
Capital expenditures will likely come in at about $1.8 billion, he said.
While Fanandakis admitted there were a "number of headwinds" impeding growth — including macroeconomic issues in several European countries — he said DuPont has a plan in place to "overcome these obstacles."
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