Agricultural and chemical company DuPont has posted a dip in second quarter profit due to lower US volumes and increased energy costs.
Overall quarterly profit slipped to $972m from $975m a year earlier, although sales grew 6 percent to $7.9bn in the quarter, due to 2 percent higher local prices, a one percent increase in volume and a 3 percent currency benefit.
According to the firm's chairman and chief executive officer Charles Holliday, DuPont is "seeing the benefit" of its global presence - capitalizing on strong routes to market in developing countries.
"We generated solid volume growth in all regions outside the United States and increased local selling prices for the 14th consecutive quarter while reducing fixed costs as a percentage of sales. We are executing our growth strategies and continuing to increase return on invested capital," he said.
In the firm's Agriculture & Nutrition business segment, pre-tax operating income dipped to $428m, compared to $430m in 2006. The segment was particularly hit by lower sales of soybeans and cotton herbicides due to reduced acres in North America.
However, these were offset by strong US seed corn and cereal herbicides sales, which pushed overall sales up 7 percent to reach $2.1bn.
In addition, the firm invested $33m in growth programs. These investments were made to accelerate biotechnology trait development, to more rapidly integrate existing traits into leading germplasm and to strengthen seed sales coverage, said the firm.
At the end of February, DuPont announced it is to begin executing its $100m reinvestment plan, which includes the addition of more than 400 positions, mainly in research and development in DuPont's subsidiary Pioneer Hi-Bred International.
The reinvestment, designed to boost the company's plant genetics and biotechnology platforms, comes after an aggressive reorganization strategy in its nutrition and crop protection businesses. Announced in December 2006, this involved closing or streamlining 10 plants and slashing 1,500 jobs globally.
The company said its new investment is the largest year-to-year increase in research in the 81-year history of the Pioneer business, a unit of the DuPont Agriculture & Nutrition platform.
The platform aims to increase support for seed and biotechnology research as well as drive a strong DuPont Crop Protection new product pipeline and Solae healthy food ingredients, said the firm.
DuPont yesterday re-affirmed its outlook for full-year 2007 performance.
"We will achieve our outlook through cost productivity gains and by continuing to deliver competitive advantages to our customers through market-driven innovations," said Holliday.