Today's DuPont story

DuPont (DD)
Share price as of Tuesday's close: $42.75
Share price now: $44.78
Percent change: 4.8%
Volume: 17.3 million shares, daily average 5.8 million

The NewsStrong growth overseas bore fruit for DuPont (DD) Wednesday after the conglomerate raised earnings forecasts for the fourth quarter and the next year. Shares closed up 5%.
The Wilmington, Del.-based maker of chemicals, building materials and agricultural products said Wednesday 2007 earnings will be at the upper end of its previously announced range of $3.15 to $3.20 a share, thanks to strong overseas seed sales. The company is scheduled to report fourth-quarter and full-year earnings on Jan. 22.

Wall Street analysts polled by Thomson Financial expected, on average, quarterly earnings of 49 cents a share and full-year earnings of $3.19 a share.

DuPont also increased its 2008 earnings outlook to a range of $3.35 to $3.55 a share, up from the Oct. 23 projection of $3.31 to $3.52 a share. Wall Street currently estimates 2008 earnings of $3.42 a share, on average.

DuPont Chairman and CEO Charles Holliday said the company expects 11% earnings growth from 2006, despite a rough year for many of DuPont's domestic businesses. Those in the construction and building materials sectors, in particular, were hit by the U.S. housing slump and higher raw materials prices.

"We expect that continued growth world-wide from our agriculture and nutrition business segment and growth from all of our segments in emerging markets will more than compensate for a slower U.S. economy," Holliday said.
The AnalysisAfter a disappointing year, DuPont's good news will give its shares a lift and clear up some uncertainties for investors.

The agriculture and nutrition business, including the Pioneer series of seeds, accounts for 23% of revenue, and its success, particularly in Brazil, is a global good-news story brightening the dreary domestic scene.
"With the announcement that they were raising 2007 estimates to the higher end of their range and a 2008 estimate that was slightly better than expected, it really gives investors the idea that this is a global company with a footprint in every major economy of the world," says Bill Selesky, an analyst with Argus Research.
Investors could use the reassurance after a trying 2007. As housing starts fell, DuPont's shares plunged, shedding 21% from their early July peak near $54.
The housing downturn has been bad news for DuPont's Tyvek building wrap, Corian countertops and titanium dioxide, a paint additive of which of DuPont is a major producer. But global demand for corn and other foodstuffs should see the company through, says Morningstar analyst Ben Johnson.

"The story of the day is that strength in agriculture is going to bridge the gap over some pretty rough waters in the North American economy," he says. "This is really helping DuPont keep their heads above water."

The Bottom LineDuPont is a great example of a blue chip capitalizing on what economist Ed Yardeni has called "the greatest global boom of all time."
Although it's far from certain that China, India and Brazil can keep up last year's torrid pace, richer economies are quickly developing robust appetites and the agriculture sector is a primary beneficiary, Johnson says. DuPont has approximately 30% of the U.S. seed business.
"DuPont slipped a bit a few quarters back, because investors were focused on the softness of the housing market, and I think there were concerns the agriculture business wasn't living up to high expectations," Johnson says. "People were wondering if DuPont was going to catch this strong tailwind like the Monsantos (MON) and Potash Corporations (POT) of the world. Hollidays' statement made it clear they were."

This article was from smartmoney.com