DuPont earnings: Stock drops on earnings miss

DuPont (NYSE: DD) is mimicking the lead of the broader market today as it heads sharply lower. The main catalyst behind the stock's 5.5% pullback was its second-quarter earnings, which failed to match the consensus view on Wall Street.

In its latest reporting period, the chemical company said net income edged lower to $972 million from $975 million last year, with per-share earnings flat at $1.04, two cents below analysts' expectations.

Revenue was 6% higher at $7.88 billion, slightly higher than the $7.86 billion Wall Street was expecting. Sales outside the U.S. were particularly strong, with revenue in Europe jumped 12% higher; U.S. sales were up just 1%.

Looking to the future, DuPont reiterated that its full-year earnings should hit $3.15 per share (excluding items). This is three cents below analysts' expected $3.18 per share. In the second half, international growth is expected to aid the company, helping to offset rising ingredient costs and continued struggles in the U.S. housing sector. As CEO Charles O. Holliday Jr. told analysts in a conference call, "I'm not assuming anything improving in North American housing until well into 2008."

Should DuPont fail to pare its losses in afternoon trading, it will suffer the biggest single-day percentage decline since July 2005. A component of the Dow Jones Industrial Average, the company is currently contributing nearly 25 negative index points to the venerable blue-chip grouping.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.