We have maintained our Neutral recommendation on
). While the chemical giant had a healthy first-quarter 2013, we
remain on the sidelines considering the lingering weakness across
a number of end markets.
DuPont beat expectations in the first quarter on strength in its
agriculture business, reflected by strong corn seeds and crop
protection products sales. The company, on Apr 23, posted
adjusted earnings from continuing operations of $1.56 per share
for the quarter, topping the Zacks Consensus Estimate by a couple
Net sales rose 2% year over year to $10,408 million, beating the
Zacks Consensus Estimate of $10,378 million. DuPont backed its
guidance for 2013.
DuPont, which carries a Zacks Rank #3 (Hold), is witnessing
strong momentum in its agriculture business. An early and strong
start in the North American growing season boosted the
agriculture business in the first quarter.
Moreover, DuPont should continue to benefit from the synergies of
Danisco acquisition and its aggressive restructuring actions.
DuPont also has numerous new products in its pipeline that are
expected to create value for its customers.
In addition, DuPont has a healthy balance sheet and remains
committed to boost shareholder returns. Its Board recently
approved a 5% increase in its quarterly dividend to 45 cents per
That said, we account for the weakness across titanium dioxide
and photovoltaic markets. Demand of titanium dioxide, which is
used to give paint and other coatings a white hue, remains weak,
partly due to the challenging economic conditions in Europe.
Lower titanium dioxide pricing is hurting the results in DuPont's
performance chemical business.
Softness across the industrial and electronic sectors is also
affecting DuPont's Performance Materials segment. The company is
also exposed to raw material costs pressure and currency
Other Stocks to Consider
Other companies in the chemical industry that are worth
Shin-Etsu Chemical Co., Ltd.
). While Shin-Etsu Chemical retains a Zacks Rank #1 (Strong Buy),
both Celanese and FMC hold a Zacks Rank #2 (Buy).
CELANESE CP-A (CE): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
FMC CORP (FMC): Free Stock Analysis Report
SHIN-ETSU CHEM (SHECY): Get Free Report
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