WILMINGTON, Delaware (Reuters) - DuPont DD.N expects to beat Wall Street’s earnings expectation next year, with executives stressing that strong agricultural and chemical sales will offset weak shipments to electronic and housing customers.
The balance reflects the elasticity of the company’s far-flung product line, where stronger businesses tend to often offset weaker peers, depending on season and economics.
Some of DuPont’s electronics and polymer customers are cutting costs and drawing down their own inventories before replenishing supplies, Chief Executive Ellen Kullman told analysts and reporters at DuPont’s annual investor day.
Other units, particularly agriculture and nutrition, are performing well as a growing world population demands more food, Kullman said.
The company, which also makes Kevlar bulletproof fabric and pigments for paint, said on Tuesday it expects to earn between $4.20 and $4.40 next year.
Excluding a 17-cent per share expense for pensions, DuPont expects to earn $4.37 to $4.57 per share in 2012.
That compares with Wall Street’s estimate of $4.23 per share, according to Thomson Reuters I/B/E/S.
“We are nurturing high-risk, high-return business models,” Kullman said. “We positioned this company to emerge stronger from the recession. Our growth playbook is working.”
Shares of DuPont rose 1.9 percent in morning trading to $44.73.
The company does expect its pension costs in 2012 to hit $875 million, up from roughly $320 million this year. The stark jump is due to lower interest rates and higher fund management expenses, the company said.
The bullish talk from Kullman and other executives came after DuPont cut its forecast for the current calendar year, citing weak electronics and housing markets.
It was the first time Kullman reduced the company’s forecast since taking the top job at DuPont in 2009.
Kullman blasted recent media reports that DuPont is selling its struggling Performance Coatings unit, saying she is “appalled at the irresponsibility.”
The sale of the unit, which sells paint to car makers and refinishers, could net DuPont as much as $4 billion, Reuters reported in October.
“Time will tell about any part of our portfolio and where it sits,” Kullman said on Tuesday. “I love all my children until I don’t love them.
“If something changes, we’ll be the first ones to come out and talk to you.”
Several private equity firms, including KKR & Co (KKR.N), Bain Capital, TPG Capital and Onex Corp OCX.TO, have made preliminary inquiries about the sale and talked to banks about financing a potential deal, sources told Reuters.
DuPont expects 2012 revenue of $40 billion to $42 billion. Analysts expect $41.4 billion.
While sales of titanium dioxide paint pigment have slowed in the fourth quarter, DuPont expects the business to be strong in 2012.
Reporting by Ernest Scheyder in Wilmington, Delaware; additional reporting by Matt Daily in New York, editing by Dave Zimmerman