EI DuPont de Nemours & Co. (
announced the completion of the acquisition of the remaining
portion of Solae, LLC joint venture from Bunge. Previously, DuPont
owned 72% of the joint venture while the remaining 28% was owned by
Bunge. DuPont entered into the joint venture in 2003 to expand its
position in the food ingredients market.
A global leader in developing soy-based ingredients for
nutritious and healthy products, Solae offers solutions that
deliver a unique combination of functional, nutritional, economical
and sustainable benefits to DuPont's customers.
DuPont believes the pre-tax earnings margins of its nutrition
and health business will be closer to the upper end of its
long-term target of 12%-14% with the full control of Solae.
Besides, the company's customers will get the benefit of increased
speed of innovation, food formulation and nutrition science
capabilities across a vast range of specialty food ingredients.
Recently, DuPont reported adjusted earnings of $1.61 per share
for the first quarter of 2012, exceeding the Zacks Consensus
Estimate of $1.55. The earnings growth was primarily driven by
strong performance in Agriculture and Performance Chemicals and the
benefit of prior-year acquisitions in Nutrition & Health and
Industrial Biosciences. Including one-time items (customer claim
charges of $50 million), earnings came in at $1.57 per share versus
$1.52 in the prior-year quarter.
Sales grew 12% to $11,230 million in the first quarter, driven
by price hikes and strong sales in the Agriculture segment.
However, it missed the Zacks Consensus Estimate of $11,239 million.
The sales volumes for Agriculture segment increased across all
regions. However, sales volumes for other segments remained flat in
DuPont reiterated its full-year 2012 earnings outlook of $4.20
to $4.40 per share, an increase of 7% to 12% compared with 2011,
excluding significant items.
We currently have a long-term Neutral recommendation on DuPont.
The company, which competes with
The Dow Chemical Company (
BASF SE (
, maintains a Zacks #3 Rank, which translates into a short-term (1
to 3 months) Hold rating.
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