(Reuters) - Chemical maker DuPont DD.N posted a higher-than-expected quarterly profit on Tuesday due to a double-digit price hike and raised its 2011 earnings forecast, pushing its shares up more than 1 percent.
Strong demand for titanium dioxide, a key white pigment used to make paint and other consumer goods, fueled much of the earnings beat.
DuPont is the largest global producer of the chemical, also known as Ti02. Even though construction and automobile markets remain weak, DuPont and rival Ti02 producers Huntsman Corp (HUN.N) and Tronox Inc TROX.PK have successfully raised prices in the past year due to tight supply.
DuPont also makes a range of niche products, including Kevlar and Tyvek. Companywide, executives were able to boost pricing in the third quarter by 15 percent.
(For a graphic on DuPont's results: click link.reuters.com/vap64s )
For the third quarter, the company posted net income of $452 million, or 48 cents per share, compared with $367 million, or 40 cents per share, a year earlier.
Excluding one-time items, including charges from the buyout this year of Danish food enzyme maker Danisco, DuPont earned 69 cents per share.
By that measure, analysts had expected earnings of 56 cents per share, according to Thomson Reuters I/B/E/S.
Net sales rose 32 percent to $9.24 billion. Analysts had expected $8.79 billion.
DuPont’s 15 percent price jump was its largest quarterly increase in more than a decade.
Most of the price rise came in the performance chemicals unit, which makes the Ti02 pigment.
The companywide increase had an effect on demand: Total volume rose only 1 percent during the quarter.
DuPont said that while demand for Ti02 remains strong, it expects a “pause” during the fourth quarter.
“Titanium dioxide remains a central element of the DuPont story,” Ticonderoga Securities analyst Mark Gulley said. “We estimate that Ti02 will be about 25 percent of this year’s earnings and next year could be a third.”
Strong Latin American sales partially offset heavy spending in DuPont’s agriculture unit, where an operating loss shrank 64 percent to $69 million.
The unit was hampered last August after DuPont recalled its widely used Imprelis herbicide. Many customers and several lawsuits had complained that the treatment killed thousands of trees.
The company spent heavily in its safety and protection unit, which makes the popular Kevlar material for bulletproof vests. DuPont recently expanded a South Carolina Kevlar plant.
Operating income in the safety and protection unit slipped 12 percent to $118 million.
Last month a U.S. federal jury awarded DuPont $919.9 million in damages, ruling that Kolon Industries Inc (120110.KS) had stolen Kevlar trade secrets. Kolon is appealing the ruling.
For the year, DuPont expects to earn $3.97 to $4.05 per share. The company had previously forecast $3.90 to $4.05.
Analysts expect 2011 earnings of $3.96 per share, according to Thomson Reuters I/B/E/S.
Shares of Wilmington, Delaware-based DuPont were up 1.5 percent at $46.80 in trading before the market opened. The stock has fallen 8 percent so far this year.
Reporting by Ernest Scheyder; Editing by Derek Caney, Gerald E. McCormick and Matthew Lewis