NEW YORK (CNNfn) - DuPont's first-quarter net income fell 11.2 percent to $906 million as the company dealt with the back-to-back challenges of absorbing new acquisitions and shutting down certain nylon manufacturing facilities.
DuPont, the largest U.S. manufacturer of basic chemicals and derivatives, said Wednesday it took a nonrecurring, after-tax charge of $145 million, or 13 cents a diluted share, in the first quarter.
The charge included two separate expenses: a $60 million fee to revise a prior estimate for the write-off last year of research and development tied to the acquisition of Protein Technologies International; and $85 million related to an earlier announced modernization program for global nylon operations.
Per-share earnings on a diluted basis slid to 79 cents from 89 cents a year ago, as net income over the period dipped to $906 million from $1.020 billion.
Excluding the nonrecurring charges, diluted earnings per share rose to 92 cents from 89 cents the year before, edging out Wall Street consensus estimates of 90 cents per share.
Net income before the nonrecurring items rose 3 percent to $1.051 billion in the first quarter from $1.020 billion in 1997.
Sales eased 2 percent to $11 billion, due primarily to lower sales by Conoco, DuPont's energy subsidiary. Conoco had earnings of $287 million, down 13 percent.
Despite the drop, DuPont (DD) shares were up 15/16 to 76-1/16 in midday trading Wednesday.
DuPont officials said the results demonstrated the chemical maker's resiliency in the face of weak currency exchange rates, slack demand from Asia, and sharply lower oil and gas prices.
After-tax income from chemicals and specialties was up 11 percent before the charges, at $867 million.
Chemicals segment earnings rose 24 percent year-to-year to $177 million from $143 million, driven by higher earnings from white pigments.
Income from fibers was down slightly to $229 million from $233 million in 1997, with increases in specialty fibers such as Lycra spandex offset by declines in Dacron polyester due to undercutting from Asian imports.
Earnings for polymers increased from $208 million to $230 million, an 11 percent rise. But petroleum earnings slackened 13 percent to $287 million.
U.S. upstream earnings declined 49 percent to $78 million due to lower prices for oil and natural gas, which was partly offset by higher natural gas volumes from boosted production in southern Texas fields acquired in 1987.
Earnings from diversified businesses were $81 million, up 45 percent from $56 million a year ago.