Shares of DuPont rise on seed business forecast

AP News
Posted: Sep 15, 2011 1:30 PM
Shares of DuPont rise on seed business forecast

Shares of DuPont Co. rose Thursday after an analyst said the chemical manufacturer's Pioneer Hi-Bred business is expected to post sales growth this year.

THE SPARK: The chemical manufacturer said Thursday that Pioneer Hi-Bred's global seed sales rose 17 percent on a compound annual growth rate between 2007 and 2010.

Jefferies analyst Laurence Alexander said DuPont "appears to be on track" to deliver 13 percent to 15 percent growth in sales this year. He also told clients in a research note that DuPont should see 4 percent to 6 percent price increases in North America both this year and next.

DuPont's comments were made during a presentation at the Credit Suisse Chemicals & Ag conference.

THE BIG PICTURE: Higher futures prices for commodities, including soybeans and corn, are helping drive sales as farmers decide whether to plant corn or soybeans to try to get the best profit.

The corn price on U.S. commodities markets has risen about 15 percent this year as corn is in short supply globally. Soybean prices have fallen about 1.4 percent because the stockpiles are more comfortable.

"Pioneer continues to replace existing technologies with new solutions to drive net pricing gains and better performance," Alexander wrote.

SHARE ACTION: DuPont's shares rose 84 cents, or 1.9 percent, to $46.36 in afternoon trading. That mirrored an increase in U.S. financial markets that came after central banks in Europe and the United States announced a joint move to support European banks. In the past 52 weeks, DuPont's share price has ranged between $42.45 and $57 a share.