Sometimes nothing goes right. EI DuPont de Nemours & Co. (NYSE: DD) posted third quarter EPS of $0.40 on revenue of $7.07 billion, compared with analysts’ expectations of EPS of $0.34 and revenue of $6.67 billion. But earnings were down from the same period a year ago, when EPS totaled $0.45. Combined with a drop in operating margin, DuPont’s shares have fallen about -2% in early trading.
Over in the steel industry, the earnings news is even grimmer. United States Steel Corp. (NYSE: X) reported a net earnings loss of -$51 million, or EPS of -$0.35 on sales of $4.5 billion. Analysts had been expecting EPS of $0.23 on revenue of $4.53 billion. To make matters worse for the steel makers, AK Steel Holding Corp. (NYSE: AKS) reported an EPS loss of -$0.54 on revenue of $1.58 billion. Analysts were expecting an EPS loss of -$0.29 on $1.53 billion in sales.
Dupont raised its earnings forecast for 2010 from $2.90-$3.05 to $3.10, but that doesn’t seem to have boosted shares either. Patent expirations on pharmaceuticals were “down substantially” the company said. The drop in pharmaceutical revenue knocked -$0.13/share off earnings — that’s a collapse of -58%. The company did not say how patent expirations may or may not affect fourth quarter earnings.
US Steel and AK Steel faced off against different opponents, and neither ended well. US Steel saw a drop in shipments and a drop in price compared with a year ago. AK Steel was hit hard by a near-doubling of iron ore prices. The company also suffers from the slow economic recovery.
In the steel business, capacity utilization is stagnant at best, prices are lower and demand is soft. Customers are drawing down inventory levels, anticipating that things are not going to get better any time soon. At AK Steel, the company is expecting operating losses per ton to fall to -$80 in the fourth quarter, from -$70 in the third quarter.
To turn around its pharmaceutical losses, DuPont is counting on the solar photovoltaic market and its safety and protection unit, which makes Kevlar. In the same period a year ago, pharmaceutical sales totaled $266 million, compared with $111 million this year. In the third quarter of 2009, sales in electronics, which includes solar PV, totaled $77 million, rising to $126 million this year. Sales in safety and protection more than doubled, from $58 million a year ago to $134 million this year.
US Steel and AK Steel are both down about -4% before noon today.
