Three percent overall revenue drop | Agriculture business fell six percent, which is the first decline in 10 quarters
(Reuters) — DuPont has reported a steeper-than-expected three percent fall in quarterly revenue as severe winter in North America delayed seeding.
Sales in the agriculture business, which is DuPont’s biggest, fell six percent, the first decline in 10 quarters, because of lower demand for seeds and herbicides in North America and lower corn plantings in Brazil and North America.
“Impact of the weather pushed a lot of the agriculture demand out of the quarter and into the second quarter,” SunTrust Robinson Humphrey analyst James Sheehan said.
Operating earnings fell five percent to $1.44 billion in the agriculture business.
However, DuPont backed its full-year 2014 operating earnings of $4.20 to $4.45 per share.
Operating earnings in the first quarter increased in five of DuPont’s seven units, including industrial biosciences, nutrition and health and performance materials businesses.
DuPont is hiving off its performance chemicals unit as part of a strategy to move into less volatile businesses. The unit has weighed on results since 2012 because of weak prices for a white pigment used in toothpastes, sunscreens and a host of other products.
Operating earnings in the business, which also makes materials used in non-stick cookware and refrigerants, fell 20 percent in the quarter.
Analysts have speculated that the sale of the unit was at the behest of Nelson Peltz, whose Trian Fund Management disclosed a stake in DuPont last summer.
Peltz called DuPont’s stock undervalued but did not spell out how he seeks to increase value. DuPont unveiled a $5 billion share repurchase program earlier this year.
A number of chemical companies, including rival Dow Chemical Co., have come under investor pressure to separate less stable businesses and raise shareholder returns.
Hedge fund titan Daniel Loeb’s Third Point LLC has urged Dow Chemical to spin off its lucrative but slow-growing petrochemical unit and focus on specialty materials.
Smaller rival Chemtura Corp. has said it would sell its agrichemicals business to Platform Specialty Products Corp. for $1 billion to focus on specialty chemicals.
Net income attributable to DuPont dropped to $1.44 billion, or $1.54 per share, in the quarter ended March 31, from $3.35 billion, or $3.58 per share, a year earlier.
Operating earnings were $1.58 per share, in line with analysts’ estimates, according to Thomson Reuters.
Revenue fell nearly three percent to $10.13 billion, missing market estimates of $10.45 billion.