Shares of chemical maker EI DuPont de Nemours & Co. (NYSE: DD) are trading slightly higher in the premarket after the company reported a rise of 26% in its first quarter. The chemical maker also affirmed its second-quarter and full-year earnings outlooks, but warned about a weak domestic demand that is likely to put pressure on growth outside the country through the rest of 2008.For its most recent quarter, the giant chemicals maker said its profit climbed to $1.19 billion, or $1.31 a share, compared with $945 million, or $1.01 a share reported in the same period a year ago. Analysts had expected DuPont show earnings of $1.29 a share, according to Reuters Estimates.
Looking at revenue, DuPont saw a growth of 9% to $8.58 billion, inline with analysts' predictions. The third-biggest U.S. chemical maker had to face continued economic worries such as higher fuel prices and declining housing markets that put a curb on consumer spending. However, the company was able to successfully surpass those obstacles, helped by the weak dollar and higher selling prices that offset flat domestic sales.
The chemical maker also reaffirmed both its second-quarter and full-year earnings outlook, citing strength in its agriculture and nutrition business and higher grain prices; soaring fuel prices gave a lift to grain prices, encouraging farmers to use more and more fertilizers and crop protection chemicals.
For 2008, the chemical maker forecast earnings in a range of $3.40 and $3.55 a share, excluding items. Analysts expectations for 2008 earnings had been $3.48 per share.
The company had to face a pretty difficult 2007 when saw its shares plunged on recession fears. Looking ahead, DuPont warned that it could see further weakness in U.S. markets that might offset international growth. But traders' optimism over the chemical maker's positive earnings sent its shares slightly higher in this morning's trading. However, it still remains under question how long the shares will keep moving upwards.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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