DuPont to Enhance Food Production - Analyst Blog

By Zacks Equity Research,

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E. I. Du Pont de Nemours and Company ( DD ) outlined goals for improving agriculture and alleviating poverty worldwide, and making food more available and nutritious while protecting the environment.

The DuPont food security goals, to be achieved by the end of 2020, include investments in newer products so that there is more food production. Moreover, it also plans to provide more and more nutritious products along with enhancing the food availability, while reducing waste. DuPont plans to invest $10 billion in research and development activities.

The company aims at providing education opportunities to 2 million young people around the world. The company also looks forward to improve the livelihoods of at least 3 million farmers and their rural communities through appropriate collaboration that will lead to strong agricultural systems.

Recently, the company released its fourth quarter and fiscal 2011 results. The company reported earnings of 35 cents per share in the fourth quarter of 2011 compared with 50 cents in the year-ago quarter. The profits exceeded the Zacks Consensus Estimate of 33 cents per share.

Sales in the quarter grew 14% to $8.4 billion due to a 14% increase in prices. The agriculture segment contributed to the increase in sales. For fiscal year 2011, sales jumped 20% to $38.0 billion.

Despite soft demand for consumer electronics segment and weak markets for housing and construction, DuPont delivered exceptional results for full-year 2011. We believe that the slowdown in global economic growth could reduce the company's capital spending, thereby adversely affecting its operating performance. Further, the company faces stiff competition from The Dow Chemical Company ( DOW ) and BASF SE ( BASFY ).

However, markets for DuPont's agriculture and food businesses continue to be strong, especially with a strong planting season in Latin America.

In view of the above stated reasons, the company retains a Zacks #3 Rank, which implies a short-term (1 to 3 months) Hold rating. Currently, we have recommended the shares of the company as Neutral for the long-term (more than 6 months).

BASF SE ( BASFY ): Free Stock Analysis Report
DU PONT ( EI ) DE ( DD ): Free Stock Analysis Report
DOW CHEMICAL ( DOW ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BASFY , DD , DOW , EI

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