In the lead up to EI du Pont de Nemours' (NYSE:DD) announcement of its third quarter earnings on Tuesday, October 23, 2012 analysts' expectations have fallen over the past month to earnings of 47 cents per share from earnings of 55 cents per share.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports
What to Expect: Whereas the consensus estimate was 70 cents three months ago, it has since fallen. For the fiscal year, analysts are projecting earnings of $3.96 per share.
DuPont is expected to report revenue of $8.14 billion for the quarter, down by 11.9% from last year's figure of $9.24 billion. DuPont is expected to report revenue of $38.41 billion for the fiscal year.
Company Performance: Revenue has risen for four consecutive quarters now. It rose 9.6% in the second quarter, 11.9% in the first quarter, 8.8% in the fourth quarter of the last fiscal year and 30.7% in the third quarter of the last fiscal year.
The past eight quarters have represented an increase in profit for the company; for the last four, it has seen an average of 5.8% growth in profit year-over-year.
DD is in line with the industry average with a P/E ratio of 13.5. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio
Over the past quarter, the stock price has risen to $49.85 from $48.87 on July 20, 2012. DuPont's worst recent stretch was when its stock price fell $2.80 per share between September 14, 2012 and October 3, 2012.
The Competition: E.I. du Pont de Nemours & Company offers products and services for markets including agriculture and food, building and construction, electronics and communications, general industrial, and transportation. Nine of 16 analysts give DuPont a buy rating. The rating has remained steady for the past three months.
The company's closest competitor in the chemical manufacturing industry is Monsanto (MON). Analysts are less optimistic about DuPont than about Monsanto. Twelve out of 18 analysts rate the latter a buy.