WILMINGTON, Delaware -- Chemicals maker DuPont said on Tuesday a U.S. economic recovery was beginning to take hold and forecast 2010 profit growth in line with Wall Street estimates.
The outlook comes as the chemical industry struggles to recover from a recession that sharply curtailed demand. Many of DuPont's customers, including automakers and electronics manufacturers, cut their spending during the past year.
As a consequence, DuPont aggressively slashed costs and realigned its business earlier this year to try to rebound quicker.
"DuPont is meeting the economic recovery as a stronger, faster and more agile global competitor," Chief Executive Ellen Kullman said at the company's annual investor day, her first as CEO. "We are well positioned to outperform the rate at which markets recover and improve."
For the 2010 fiscal year, DuPont expects earnings of $2.10 to $2.40 per share excluding one-time items.
By that measure, analysts expect $2.24 per share, according to Thomson Reuters I/B/E/S estimates.
The company forecast sales for the year of $29 billion, higher than analysts' forecast of $28.12 billion.
Chief Financial Officer Nick Fanandakis, also in his first meeting in an executive role, told attendees, "The recovery is really starting now."
The bullish outlook comes despite the 2010 loss of patent protection for the blood pressure drugs Cozaar and Hyzaar.
The drugs are expected to add $1.1 billion to DuPont's pretax earnings this year. That is expected to drop to between $300 million and $350 million next year, and to $70 million in 2012.
"We will deliver earnings growth next year despite the Cozaar earnings growth decline," Kullman told investors.
The company expects earnings per share to grow at a compound annual rate of 20 percent over the next three years.
Emerging markets are expected to help fuel much of that growth, the Wilmington, Delaware-based based company said.
Over the next three years, revenue from emerging markets -- countries like India and China, among others -- is expected to jump 50 percent to $12 billion.
The company also expects its free cash flow to drop from a projected level of $2.5 billion in 2009 to at least $1.5 billion in 2010. That drop will come as spending increases during the economic recovery, executives said.
DuPont made a point to stress the low cost advantage it has in its titanium dioxide business, which makes paints and related products for the automotive industry.
Huntsman Corp (HUN.N: Quote, Profile, Research, Stock Buzz) is trying to buy the Ti02 assets of bankrupt rival Tronox, a move that would give Huntsman a competitive advantage in the market.
Kullman declined to comment as to whether DuPont would be interested in also bidding for the Tronox assets.
"We're watching it very closely to see what is going on," Kullman told reporters after the event.
DuPont shares rose 21 cents to $32.48 in afternoon trading on the New York Stock Exchange.
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