DuPont, the world’s second-largest chemical company, reported Q1 2010 profits of $1.13 billion. Those are more than double the profits DuPont reported this time last year. Unlike the banking industry, DuPont’s profits came from an actual increase in business across units. CB Online breaks down where DuPont made its profits–and what that means for the global economy:
Overall sales volume increased by 19 percent, led by a 65 percent volume increase in the Asia-Pacific region. Performance among DuPont’s various business segments was led by the electronics and communications unit, which reported a 60 percent increase in volume on strong global demand, led by the Asia-Pacific region, and increased demand for photovoltaics.
DuPont’s performance materials unit saw volume increase by 56 percent as demand improved in the automotive, industrial, consumer and electronic markets. The company had been relying on results from its agriculture and nutrition business while units that sold coatings and other products to the automotive and housing markets struggled during the recession. Those businesses saw strong gains in revenue and operating profit during the first quarter.
As in the fourth quarter, DuPont’s performance chemicals unit saw increased demand for titanium dioxide in the first three months of this year. DuPont officials have said demand for products such as titanium dioxide, a white pigment used in consumer goods, house paint and automotive coatings, often indicates whether the economy is growing or contracting, particularly in the short term.
DuPont on Tuesday cited a recovery in the automotive and industrial markets, and moderate strengthening in construction markets, for improved performance in its safety and protection unit, whose products include Kevlar aramid fiber and Tyvek house wrap.
Also, from the DuPont website:
Pharmaceuticals first-quarter pre-tax income was $221 million, about $60 million higher than anticipated. The company expects full-year Pharmaceuticals pre-tax income of $360-$400 million.
First-quarter 2010 consolidated net sales of $8.5 billion were 23% higher than 2009. This reflects 19% higher volume, 2% higher local selling prices, and a 3% positive impact from currency exchange rates, partly offset by a 1% reduction from portfolio changes.
In other words, Asia is contributing to most of the volume increase that, in turn, increased DuPont’s profits. Where is the global economy recovering, then? Asia. Perhaps DuPont’s profits aren’t telling us much that we don’t already know, after all.