In mid-December, E.I Du Pont De Nemours (NYSE:DD) announced its 2011 earnings per share would likely be a dime lower than its earlier forecast of $3.97 to $4.05. Even if earnings come in at the low-end of the range around $3.87 a share, there's still plenty to like about the global chemical company. Here are three reasons its future is bright.

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2012 Forecast

Despite cutting its 2011 earnings slightly last month, DuPont still expects a strong 2012 with revenues of at least $40 billion and earnings per share of $4.37. Leading the way will be its agriculture and nutrition products, as well as growth in the emerging markets of Asia and Latin America. In addition, its U.S. business is performing far better than anticipated. The two major concerns being Europe and its performance coatings unit, which sells paint to car manufacturers.

Rumor has it several private equity firms, including KKR (NYSE:KKR) and Onex (TSE:C.OCX), might be willing to pay as much as $4 billion for the struggling business. While Ellen Kullman, DuPont's CEO, denies any interest in selling, that would enable it to focus on its more profitable business segments. At a Jan. 3 closing price of $46.51, it's trading at less than 11 times earnings. This compares favorably to both The Dow Chemical (NYSE:DOW) and BASF (OTCBB:BASFY).

Agriculture and Food

In the most recent edition of Rotman, the University of Toronto's business school magazine, Kullman discusses the future of DuPont. One of only 12 female CEOs running a Fortune 500 company, the Delaware native took the reins in 2009 and immediately went to work focusing DuPont on the megatrends that will affect this planet for generations to come. Kullman pushed it into agriculture, nutrition, health, biotechnology and renewable energy. None of these were truly on its radar prior to her arrival and now represent the future of the company. A big step forward came in Jan. 2011 when it acquired Danisco, a Danish ingredient and enzyme company, for $6.3 billion. The acquisition was its second-largest in recent memory, creating two new reportable segments: Industrial Biosciences and Nutrition & Health. In the first nine months of 2011, those two segments delivered $2.07 billion in revenue, 130% higher than in the same period a year earlier. While generating very little pretax operating income at the moment, it's expected that this segment will deliver long-term revenue growth of at least 7% and net margins of 12%. With estimated 2011 revenues of $2.5 billion, we're talking about net income of $300 million. (To know more about acquisitions, read Analyzing An Acquisition Announcement.)

Emerging Markets

Revenues for the first nine months of 2011 in emerging markets were tremendous. The biggest gain came from Latin America, which experienced a sales increase of 35% to $3.5 billion, followed by the Asia Pacific region at 28% and EMEA (Europe, Middle East and Africa) at 24%. All four geographic regions represent at least 10% of overall revenues. Asia can expect most of the world's population growth in the next 40 years and therefore will need 70% more food production and additional energy to meet this growth. Not only will its agriculture business and assist in the growth, but so too will its electronics, automotive and packaging businesses. The revenues in Asia Pacific are about 58% of those in Canada and the U.S. Given current growth rates, they could exceed them by the end of the decade.

The Bottom Line

If you need a large cap stock to fill a gap in your portfolio, you could do a lot worse than DuPont. Especially now that it's changed course in search of growth. It's how a 210-year-old business stays in business. (For additional reading, check out 5 Must-Have Metrics For Value Investors.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Will Ashworth did not own shares in any of the companies mentioned in this article.

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