DuPont sales miss on weak solar, electronic demand

Fourth-quarter profit was slightly ahead of Wall Street's estimates, however, after DuPont raised prices by an average of 14 percent across its product lines. Without the price increase, revenue would have been roughly flat.

DuPont's results often serve as a barometer for the global economy since its products are used to produce nearly every consumer good, from toys and toothbrushes to smartphones and solar panels.

Sales of solar products fell during the fourth quarter as the solar industry worked off a glut of supply from verproduction.

DuPont Chief Executive Ellen Kullman said she expected solar customers to continue to hold off on additional purchases in the first quarter, but to reverse that trend later this year. Photovoltaic panel installations should increase 10 percent this year from 2011, she said.

DuPont's report comes the same day Germany's Siemens , a bellwether for Europe's manufacturing industry, posted a lower-than-expected quarterly profit, partly due to weak sales of wind turbine materials.

Shares of Wilmington, Delaware-based DuPont fell 1.2 percent on Tuesday morning but pared losses to trade up 3 cents at $49.38 in the afternoon.

Kullman downplayed the effects of a weak world economy but conceded that customers are seeking to conserve cash.

We expect some conservatism in the first quarter, with a rebound effect in the second quarter, she told analysts on a conference call. As we look ahead to 2012, we expect modest sales growth.

Kullman did not change DuPont's 2012 earnings target of $4.20 to $4.40 per share, mostly above the $4.26 expected on Wall Street.

For the fourth quarter, the company posted net income of $373 million, or 40 cents per share, compared with $376 million, or 40 cents per share, a year earlier.

Excluding a $100 million charge to settle claims that a DuPont herbicide was killing trees, as well as other one-time items, the company earned 35 cents per share.

By that measure, analysts expected a profit of 33 cents per share, according to Thomson Reuters I/B/E/S.

A 10 percent drop in volume drained earnings by 20 cents per share, DuPont said.

Sales rose 14 percent to $8.43 billion. Analysts expected $8.53 billion. The last time DuPont's revenue missed Wall Street's expectations was the third quarter of 2009.

Sales of pesticides and genetically modified seeds to farmers ahead of the North American spring planting season helped push agricultural revenue up 8 percent to $1.3 billion.

To offset higher metal costs, DuPont raised prices on some electronics by 15 percent in the fourth quarter. That pushed sales of parts to solar panel and consumer electronic producers down 18 percent to $630 million.

Best Buy Co , the world's largest consumer electronics chain, said earlier this month that its same-store sales fell 1.2 percent in December.

Last month Kullman told investors that food and nutrition sales would increasingly bring in a larger chunk of the chemical maker's revenue.

DuPont's agricultural products should continue to sell well, with other products catching up in the third and fourth quarters, said Mark Gulley, a Ticonderoga Securities analyst.

I think their more economically sensitive areas will recover later this year, he said.

DuPont raised its expectation for its 2012 tax rate to 23 percent from a previous estimate of 22 percent. The increase is because the company now expects increased sales in countries with high taxes, Chief Financial Officer Nick Fanadakis said.

The Environmental Protection Agency ordered DuPont to stop selling its Imprelis herbicide last August, after thousands of customers complained that the product was killing certain evergreen tree species.

(Reporting By Ernest Scheyder in New York; Editing by Lisa Von Ahn and Matthew Lewis)