E.I. du Pont de Nemours & Company DD
Q2 2012 Earnings Call Transcript
Operator: Good morning. My name is John and I will be your conference operator today call. At this time, I would now like to welcome everyone to the DuPont Quarterly Investor Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period.
In the interest of time, management requests that you limit yourself to one question and one follow-up question, and please pick up your handset to allow optimal sound quality. If you have additional questions, you may re-enter the queue. To listen to the webcast, please go to www.dupont.com. Thank you.
It is now my pleasure to turn the floor over to your host, Karen Fletcher, Vice President of Investor Relations. Karen, you may begin.
Karen A. Fletcher - VP, IR: Thank you, John. Good morning and welcome. With me today are Ellen Kullman, Chair and CEO; and Nick Fanandakis, Executive Vice President and CFO. The slides for today's call can be found on our website at dupont.com, along with the news release that was issued earlier today.
During the course of this conference call, we will make forward-looking statements, and I direct you to Slide 2 for our disclaimers. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially.
We will also refer to non-GAAP measures and request that you review the reconciliations to GAAP statements provided with our earnings news release and on our website. As a reminder our comments on today's call regarding segment earnings are on an underlying basis. Finally, we've posted supplemental information on our website that we hope is helpful for your understanding of our Company's performance.
It's now my pleasure to turn the call over to Ellen.
Ellen J. Kullman - Chair of the Board and CEO: Great. Thank you, Karen, and good morning, everyone. DuPont executed well in the quarter and delivered strong results despite macroeconomic headwinds. We continued growth momentum with particularly robust volume growth in Agriculture, food and enzyme markets. Company sales were up 7% despite a 3% currency headwind. Excluding currency sales were up in all regions. Sales to developing markets grew 11% versus a very strong comp. While volumes were down in Europe and Asia we continue to see sequential improvement on a seasonally adjusted basis. Volumes were up 5% and 3% in China and India, respectively, versus the second quarter of 2011 which is another measure of good momentum in the regions. Underlying earnings grew 8% to $1.48 per share, at a segment level pretax operating income was up 13% excluding pharmaceuticals.
I would like to highlight some of the important milestones from the quarter. First we passed the one-year anniversary of the Danisco acquisition in May. The contributions and benefits from the acquisition have exceeded our expectation. We added two very attractive businesses to our portfolio and identified significant opportunities for cost and revenue synergies. This newly created reporting segments of Nutrition & Health and Industrial Biosciences, delivered strong performance this quarter and are expected to combine for over $4.5 billion in sales this year, with a pretax operating margin in the 10% to 14% range.
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