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E. I. du Pont de Nemours and Company (DD)
Q3 2009 Earnings Call Transcript
October 20, 2009 9:00 am ET
Karen Fletcher – VP, IR
Ellen Kullman – CEO
Jeff Keefer – EVP and CFO
Nick Fanandakis – SVP
Sergey Vasnetsov – Barclays Capital
Jeff Zekauskas – JPMorgan
PJ Juvekar – Citi
Ashish Gupta – Sterne Agee
John Roberts – Buckingham Research
David Begleiter �� Deutsche Bank
Frank Mitsch – BB&T Capital Markets
Mark Gulley – Soleil Securities
Robert Koort – Goldman Sachs
Steve Shuin [ph] – Vayad Research [ph]
Peter Butler – Glen Hill Investment
Edward Yang – Oppenheimer
Laurence Alexander – Jefferies
Don Carson – UBS
Kevin McCarthy – Banc of America
Chris Shaw – Ticonderoga Securities
Previous Statements by DD
» E.I. du Pont de Nemours Q2 2009 Earnings Call Transcript
» E.I. du Pont de Nemours and Company Q1 2009 Earnings Call Transcript
» E.I. DuPont de Nemours & Co. Q4 2008 Earnings Call Transcript
It is now my pleasure to turn the floor over to your host Karen Fletcher, Vice President of Investor Relations.
Good morning and welcome. With me this morning are Ellen Kullman, CEO, Jeff Keefer, CFO and Nick Fanandakis CFO designate. The slides for today’s call can be found on our Web site at dupont.com, along with the news release that was issued earlier today.
Please turn to slide two. During the course of this conference call, we will make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks and assumptions. We urge you to review DuPont’s SEC filings for a discussion of some of the factors that could cause actual results to differ materially.
We will also refer to non-GAAP measures and request that you please refer to the reconciliations to GAAP statements provided with our earnings news release and on our Web site. And finally, we have posted supplemental information on our Web site that we hope is helpful to your understanding of our company’s performance.
With that, I will turn the call over to Ellen.
First of all, let me say I'm pleased with our third quarter earnings performance in which aggressive cost productivity results are clearly evident, coupled with higher sequential sales for most of our industrial businesses. Company sales this quarter excluding Ag are up 11% on a sequential basis. The underlying demand signal that is emerging reflects a developing recovery that is shaped differently by market and by geography.
Let me touch on a few areas where early signs of recovery are becoming more clear. DuPont titanium dioxide is approaching a sold-out [ph] position. Our coatings and polymer products experienced strong demand in response to increases in motor vehicle production and engineering polymer products experienced an additional boost from re-stocking demands across their automotive supply chains in the quarter.
From a regional perspective, Asia Pacific year-over-year comparison was encouraging with sales only down 5%. On a closer look, China sales were up 7% year-over-year and sales in India, Singapore and Vietnam were down just a few percents. U.S. and European markets are showing some signs of improvements, but are clearly lagging behind Asia.
On the other hand, our aramids business, which includes Nomex and Kevlar was late heading into the downturn and lagged into the third quarter. Demand for aramid products was weak in the third quarter with more destocking occurring than we had expected coming into the quarter. More recent sales trends indicate demand for Kevlar is turning up though.
Our Ag & Nutrition sales were down 5% due in part to weather and lower corn acreage in Latin America, seed sales were up 7% over last year, helped in part by strong sales of Y series soybeans. We anticipate great yield performance from this new family of products once the harvest data is in.
Sales of Rynaxypyr insecticide are about 140 million year-to-date, indicating that we will easily surpass our sales target of 150 million and be closer to 200 million this year which is the second year of launch. The success of Rynaxypyr is an outstanding example of how we identify market need, developed a family of products with exceptional performance and are meeting with enthusiastic response from customers around the world.
Stepping back to a broader view of DuPont's market-driven science at work, we launched 323 new products in the quarter, bringing our year-to-date total to 1,107 or almost 50% more than the first three quarters of 2008. I am pleased that our businesses continue to see every opportunity in today’s difficult environments to bring value to customers using new products to help them differentiate their own offerings in the marketplace.
Another example of how we are putting new products to work is in the photovoltaics market. After a slow start to the year, we're seeing a rebound in PV markets in the second half. While the 2009 market will likely end up flat versus 2008, we expect our sales to be up over 10% this year. We believe annual growth rates will return to more historic levels of around 30% annual growth starting next year and we're focused on delivering a constant stream of product innovation and value. PV customers have aggressive cost reduction targets to meet as well as greater environmental responsibilities.
And we recently introduced a new generation of Solamet metallization paste that contributes to a solar module with a significantly reduced environmental footprint. These pastes meet high product performance requirements without requiring the use of materials such as lead or cadmium containing glasses.