E.I. du Pont de Nemours & Company Earnings Call Nuggets: Corn and Soybean Markets and EPS Guidance
E.I. du Pont de Nemours & Company (NYSE:DD) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Corn and Soybean Markets
Kevin McCarthy – Bank of America: Can you give us a sense of Pioneer’s share fluctuations in Brazil for both the corn and soybeans markets please.
Ellen Kullman – Chair of the Board and CEO: We’re winning in corn in Brazil without multi-point share gain in summer corn again. We are expecting large Safrinha corn hectares maybe up 15% to 20% and we’re experiencing strong orders for the Safrinha season. So soy from a share standpoint is flat. So, our investments there are paying off. We had a very strong season as you can see from our results in the fourth quarter, and it’ll be terrible if I let out the fact that our Crop Protection business is having a great season in Latin America as well led by Rynaxypyr and so overall for our entire Ag segment we’re seeing Latin America very strong.
Kevin McCarthy – Bank of America: As a follow up if I may, can you characterize the magnitude of inflation in seed production costs in 2013 and do you think you might be able to get enough price through to preserve margin there?
Ellen Kullman – Chair of the Board and CEO: As you see from our results in the fourth quarter, we had lower than expected seed cost, that’s a positive. But what happened last year, we do expect to see obviously higher seed cost coming into the North American season. I mean if you look at it from a total Company standpoint, our (raws) were expecting from a Company standpoint to be up about 5% and that’s both from a seed cost standpoint and TiO2 ore standpoint are the two drivers to that. Higher seed imports year-over-year will press your margins slightly but we think with the improved yields and performance of our products out there and we have been out all about I guess November or December talking about 5% to 10% net price increase in North America. We think that bodes well for a strong year.
Chris Nocella – RBC Capital Markets: Just on your EPS guidance for 2013 versus the guidance you gave in early December, you lowered the performance of (a couple of) segment. So which businesses now do you expect to be higher or is just that you are including the share repurchases now into your guidance?
Ellen Kullman – Chair of the Board and CEO: Yes. We are including the share repurchase now in our guidance and we gave kind of a soft range low to mid and I think you see it coming in at 2% to 7%. It’s pretty consistent with that. We have some puts to take. We had a stronger Ag season coming through the fourth quarter and obviously we have changed a couple of segments minorly, but I think things occurred pretty much as expected. We are just getting a lot more specific about 2013.
Chris Nocella – RBC Capital Markets: Just on your macro outlook you assumed 2% global GDP growth which seems conservative for next year. If that number were to be higher which businesses you think would see the most upside leverage in terms of volume and margin growth?
Ellen Kullman – Chair of the Board and CEO: Nick?
Nicholas C. Fanandakis – EVP and CFO: Yes. I think the macro conditions are going to drive a lot of areas in the Company but some of the key points would probably be in our Chemicals segment. Some of those macro conditions are going to drive some of things around TiO2 demand and how quickly that turns. It would also impact our S&P segment around the industrial side. You would see some keys there as well. I think Performance Materials would see an impact if you saw GDP gross more robust than the numbers that we’ve quoted.