Danisco buy-out fails to dent DuPont Q2 earnings

By Shane Starling

- Last updated on GMT

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Danisco buy-out fails to dent DuPont Q2 earnings
Dupont, which earlier in the year warned that its May $6.49bn acquisition of Danisco would dent its yearly profits, has defied expectations in second quarter results published today.

DuPont recorded net income of $1.22bn, compared to $1.17bn the same quarter in 2010, and said economic recovery had permitted a return to pricing strength that allowed it to offset the Danisco purchase to a degree, as well as raw material price hikes.

Those price rises added up to $756m compared to $540m in increased raw material costs.

Revenue jumped 19% to $10.26 billion compared to analyst predictions of $9.68 billion, with Danisco contributing about 3% of those sales for the quarter.

“The increase principally reflects higher selling prices, increased sales volume and currency benefit, partly offset by higher raw material, energy and freight costs,”​ the company said.

Genetically modified (GM) seeds and fertilisers, Kevlar used for bullet-proof materials and titanium dioxide paints predominantly sold to car makers were the strongest performers. The seeds and fertilisers business is the company’s biggest earner with sales of about $2.99bn for the quarter and earnings of $826m.

In the company webcast chief executive officer Ellen Kullman said: "DuPont is executing well. We continue to stay close to our customers and market."

Nutrition and health

Sales in the nutrition and health cluster came in at just under $500m, compared to $300m in Q2, 2010, with the bulk of that gain coming from the Danisco one-month input.

Pre-tax operating profits for the cluster jumped from $18m to just below $40m.

DuPont forecast sales of $1.6-$1.7bn for the second half of the year for the nutrition and health division, driven by Danisco sales and increased prices.

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