A Good Enough Finish to the Year
Even DuPont's fourth quarter earnings were an exercise in good news and bad news. To the good, the company reported that sales climbed 15% to about $7.4 billion - a fine performance that surpassed even the highest estimates. Growth was fueled in part by double-digit volume growth, and the company saw strength in the U.S., Asia and Latin America.
Unfortunately, the company did not do nearly so well on its profitability. The company did okay at the gross margin level, but operating income was a little disappointing. Moreover, while the company did beat the average estimate by 18 cents, 15 cents of that came from an unexpectedly low tax rate. Consequently, a much better top-line performance delivered only three extra pennies of earnings. Not exactly an exciting result.
Looking at the segments, some of the trouble becomes more apparent. Revenue in the sector was up a solid 13%, but the company actually worsened its operating loss from a year ago. Although the company did see very solid operating leverage in electronics and communications and performance chemicals, businesses like Performance Coatings and Safety/Protection weren't so exciting. Some of the trouble was due to input costs, ironic in a sense given that DuPont is so often grouped with those basic input producers.
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