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Diversified chemicals manufacturer and Dow-30 component DuPont (DDFree DuPont Stock Report) has reported second-quarter results. Sales of $11.0 billion increased 7% over the year-earlier figure, reflecting greater local prices and portfolio changes. Growth in developing markets was particularly strong, with the top line increasing 11% in these regions. This was partly offset by unfavorable currency movements and a modest decline in sales volumes. The Agriculture business experienced good growth in seed sales and crop protection products, thanks to favorable agricultural conditions and healthy demand. Elsewhere, both the Industrial Biosciences and the Nutrition & Health lines continued to benefit from the Danisco acquisition, which more than offset softness at several other business lines. Overall, share earnings of $1.48 matched our estimate and exceeded the comparable 2011 tally of $1.37.

The solid performance will probably continue in the coming quarters. Overall, we anticipate sales of roughly $41 billion for full-year 2012. The company now expects share net to be toward the lower end of its $4.20 to $4.40 guidance range, due to macroeconomic uncertainties (discussed below), unfavorable currency trends, and a higher tax rate. Consequently, we have lowered our 2012 share-net call by a dime, to $4.25, and the stock fell modestly on the news.

As a diversified manufacturer of chemicals, the company remains vulnerable to weakness in the global economy. Macroeconomic challenges in Europe, elevated unemployment in the United States, and a potential slowdown in emerging markets all could hurt performance going forward. Indeed, our estimates may prove somewhat optimistic, should the economic situation deteriorate markedly.

Nevertheless, DuPont remains well positioned in its markets, and we expect that it will continue to benefit from global economic growth over the longer term. Moreover, DD stock earns good marks for Safety and Price Stability, and the company's Financial Strength Rating is top notch. Overall, this issue offers healthy total return potential for the coming years.

About The Company:DuPont is engaged in science and technology in a range of disciplines, including high performance materials, electronics, safety and security, and biotechnology. The company operates on a global scale, manufacturing a wide range of products for distribution and sale to many different markets, including automotive, construction, agricultural, medical, protective apparel, electronics and nutrition.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.