Executive Business Briefing

NEW YORK, April 29 (UPI) -- Here is a look at more of Tuesday's top business stories:

DuPont posts profit

WILMINGTON, Del., April 29 (UPI) -- DuPont Co., the nation's second-largest chemical company, said it posted a first-quarter profit, as stronger sales offset surging energy and raw material costs.

DuPont also warned that its second-quarter profits would miss Wall Street forecasts.

DuPont said the near-term outlook was "somewhat restrained" by slack industrial demand, noting that the chemicals business has not fully recovered from a long slump.

For the first quarter, DuPont reported a net income of $535 million, or 53 cents a share, compared with a net loss of $2.47 billion, or $2.46 a share during the same period a year earlier.

DuPont, which is in talks to sell its $6 billion-a-year textiles business, said revenue rose to $7.19 billion from $6.10 billion, driven by a 7-percent volume increase on higher sales of pharmaceuticals, agricultural and nutritional products. It was also helped by the effect of a weaker U.S. dollar.

Charles O. Holliday, Jr., chairman and chief executive officer, said, "Our sales growth in the first quarter reflects strong volume increases in each of our five growth platforms and DuPont Textiles & Interiors.

"This broad-based volume growth, combined with particularly strong results in pharmaceuticals, agriculture & nutrition and safety & protection, offset the impact of higher pension, energy, and raw material costs in the first quarter. Our businesses performed well, maintaining their momentum even better than expected through the end of the quarter," Holliday said.

DuPont said its second-quarter profits would be in the mid-50 cents a share range, well short of Wall Street analysts' consensus estimate of 63 cents a share, according to First Call.

The negative impact of energy costs in the second quarter is expected to be at least double the level in the first quarter, DuPont said.

DuPont also said that higher non-cash expenses, mostly from pensions, would lower results by 10 cents a share per quarter throughout 2003, compared with last year.

"Our leadership fully understands the near term challenges -- slower economic growth and higher costs," said Holliday.

"Our businesses are focused on what they can control, keeping a tight rein on cash costs and driving sales and volume growth by staying close to the customer. I am confident that we will continue to outperform our competition," Holliday added.

Northrop Grumman posts profit

LOS ANGELES, April 29 (UPI) -- Northrop Grumman Corp. said it posted a first-quarter profit on strong results in its intelligence and space-technology units and lower taxes.

The nation's second-largest weapons maker behind Lockheed Martin Corp. reported a net income of $253 million, or $1.34 a share, compared with a net loss of $283 million, or $2.56 a share during the same period a year earlier.

The company issued about 70 million shares of common stock in conjunction with its purchase of TRW Inc. in December. First-quarter earnings per share are based on 184.3 million weighted-average diluted shares outstanding versus 112.8 million shares a year earlier.

Sales jumped 49 percent to $5.87 billion from $3.93 billion a year earlier.

Analysts had expected sales of $5.89 billion in the 2003 period, which is the first full quarter to include TRW operations.

Earnings from continuing operations grew 17 percent to $174 million, or 91 cents a share, from $149 million, or $1.27 a share, a year earlier. These results exclude a hefty year-earlier accounting charge and the impact of discontinued operations in both periods.

Increased government spending on defense and homeland security is expected to keep Northrop busy. The company has forecast 2003 sales of $25 billion to $26 billion and 2004 sales of $28 billion to $29 billion.

Northrop has tripled its size in two years and greatly expanded its product line.

Most recently, it gobbled up TRW and created two new divisions -- mission systems and space technology.

Northrop sold TRW's automotive-parts business to Blackstone Group and has said it plans to use the $3.9 billion in cash it received from the deal to pare its debt.

Martin Marietta posts loss

RALEIGH, N.C., April 29 (UPI) -- Construction materials maker Martin Marietta Materials Inc. posted a first-quarter loss due to higher energy costs, the shaky economy and bad weather that slowed shipments and production.

The company posted a first-quarter net loss of $20.9 million, or 43 cents a share, compared with a net loss of $22.1 million, or 45 cents per share during the same period a year earlier.

Results for both periods included charges for a change in accounting. Stripping out the one-time items, the loss for the latest quarter was $10.6 million, or 29 cents a share, compared with a loss of $5 million, or 22 cents a share, a year-ago.

Analysts on Wall Street were expecting the company to post a loss of 28 cents a share, according to research firm Thomson First Call.

Earlier in April, Martin Marietta warned it would post a wider first-quarter loss. It also said at the time that the soft economy makes for an uncertain outlook over the remainder of the year and earnings of $1.85 to $2.20 a share for the full year.

Commenting on the results, Stephen P. Zelnak, Jr., chairman and chief executive officer, said, "The first quarter was negatively affected by continued weak economic demand and by extremely poor weather conditions, that restricted both shipments to customers and production operations.

"The commercial construction market continued to decline while state budget deficit issues and the delay in Congress in passing the fiscal 2003 federal highway authorization affected the level of highway construction spending. Further, while winter weather generally adversely affects first quarter results, particularly at our Midwest, MidAmerica and Northwest locations, unusually poor weather occurred at our operations in the Southwest and Southeast, with the exception of Florida," Zelnak said.

The company said its outlook for 2003 remains uncertain.

"Management continues to focus on productivity improvements and overhead reductions, which are necessary to maximize profitability. However, the duration of the soft economy, with its impact particularly on infrastructure and commercial construction markets, coupled with the absorption of fixed costs as they affect operations, is the primary driver of uncertainty," Zelnak said.

"The impact of budget deficits on states' road spending and the volatility of energy prices also continues to be a significant concern. On a positive note, many of our major customers indicate strong work backlogs despite the soft economy," Zelnak added.

Looking ahead, the company expects net earnings to fall in the range of $1.85 to $2.20 a diluted share for 2003. For the second quarter it expects net earnings to be in the range of 70 cents to 80 cents a diluted share.

Phelps Dodge loss narrows

PHOENIX, April 29 (UPI) -- Phelps Dodge Corp., the world's largest publicly traded copper producer, said its losses narrowed as a gain from an accounting change and improved copper prices offset weak global copper demand.

Phelps Dodge reported a first-quarter net loss of $15 million, or 21 cents a share, compared with a loss of $24.8 million, or 32 cents a share during the same period a year ago.

Excluding an accounting change, Phelps Dodge posted a loss of 30 cents a share.

Analysts on Wall Street were expecting the company to post a loss of 32 cents a share, according to research firm Thomson First Call.

J. Steven Whisler, chairman, president and chief executive officer, said, "Our first-quarter operating earnings before special items showed improvement compared with both the first and fourth quarters of 2002.

"The principal contributor to this improvement was a 5-cents-per-pound improvement in the LME copper price. While we are positioned to reap the benefits of a sustained recovery in copper prices, that recovery is not yet apparent," Whisler said.

"Worldwide economic conditions, particularly in the manufacturing and capital goods sectors, remain soft and sluggish. Demand for copper has clearly stabilized, but is not yet growing. North American and European copper consumption trends remain flat. China continues to be the bright spot, growing at double-digit rates," Whisler added.

Ultimate Electronics cuts outlook

DENVER, April 29 (UPI) -- Ultimate Electronics Inc. has cut its first quarter outlook because of a large snowstorm, when the company saw a 17-percent decline in same-store sales, but maintained its previous guidance for the next three quarters.

For the first quarter ending Wednesday, Ultimate Electronics expects to report a loss of 9 cents to 13 cents a share, wider than analysts' expectations of a 3-cent loss, according to Thomson First Call.

The company's estimates are also wider than its previous expectations, which called for a loss of 1 cent to 4 cents a share, and below last year's earnings of 15 cents a share.

The company also blamed the current economic environment and the war in Iraq for its first quarter revision.

Same-store sales fell 8 percent to 9 percent during the first quarter, with a 4 percent decline between April 12 to date.

Now, however, Ultimate Electronics believes that results for the second half of April indicate that sales could be returning to the company's pre-war expectations for fiscal 2004.

Ultimate Electronics said it expects an 8-percent to 9-percent drop in first quarter same-store sales and total sales are expected to be between $154 million to $157 million, below analysts' expectations of $166.7 million, and down from last year's sales of $142.2 million.

The company is scheduled to release first quarter results May 8.

Ultimate Electronics also said it would maintain its guidance for the second, third and fourth quarters, despite soft consumer spending conditions the company believes would continue in the aftermath of the Iraq war and the current economy.

The company previously expected breakeven results for the second quarter, in line with Wall Street estimates, and below last year's earnings of 6 cents a share.

For the third quarter, Ultimate Electronics still expects to earn 5 cents to 10 cents a share. Consensus expectations are 7 cents a share. The company earned 12 cents a share in the year-ago third quarter.

And for the fourth quarter, the company expects to still earn 45 cents to 60 cents a share. Analysts expect the company to earn 49 cents a share. Ultimate earned 17 cents a share in the fourth quarter last year.