Here is a look at more of Wednesday's top business stories:
Earnings jump at DuPont
WILMINGTON, Del., Oct. 23 (UPI) -- DuPont Co., the nation's largest chemical company, said its third-quarter net income rose sharply on a more favorable tax rate and higher prices for some of its chemicals and plastics.
The company, which is a component of the Dow Jones industrial average, said its net income jumped to $469 million, or 47 cents a share, from $142 million, or 13 cents a share during the same period last year.
Excluding items, DuPont said it earned 40 cents a share.
Analysts on Wall Street had expected the company to post a net income of 35 cents a share, according to Thomson First Call.
DuPont said its consolidated sales slipped to $5.5 billion from $5.6 billion a year ago. Segment sales, including transfers and a pro rata share of sales by equity affiliates, declined 2 percent to $6.2 billion from $6.4 billion during the same period last year.
On a comparable business basis, excluding the impact on sales attributable to acquisitions and divestitures, DuPont said sales increased 4 percent reflecting 6 percent higher volume, partly offset by 2 percent lower U.S. dollar selling prices.
Charles O. Holliday, Jr., chairman and chief executive officer, said, "Our third quarter results showed steady improvement with progress across most businesses, particularly those supporting the housing, automotive and agricultural industries.
"While overall volume growth has been strong, the pricing environment remains difficult. We remain focused on executing well in the present while driving our long-term sustainable growth objectives," Holliday said.
DuPont said sales at its Agriculture and Nutrition unit increased 12 percent reflecting higher sales of crop production and food ingredient products as well as the acquisition of Liqui-Box.
Sales at DuPont's Coatings & Color Technologies unit increased 6 percent reflecting higher volumes in the motor vehicle-related businesses and benefit from the weaker dollar.
The company said sales at its Electronic and Communication Technologies unit grew 5 percent from a very weak third quarter last year while sales at its Performance Materials unit increased 8 percent.
Looking ahead, DuPont said it expects economic growth to continue in the fourth quarter, but at a pace moderately below third quarter growth rates.
The company expects U.S. automotive and housing markets to remain strong and consumer spending to hold up reasonably well. On the negative side, energy-related raw material costs are trending up at a time when selling price increases remain difficult to achieve.
Taking all these factors into account, including the revised full-year income tax rate estimate, the company said its earlier fourth quarter earnings outlook remains unchanged. That is, the company expects underlying fourth quarter earnings per share to be about triple those of the prior year, which would result in full-year underlying earnings of approximately $2 a share.
"While we cannot control the economy, we can control how we execute our business plans in the face of economic challenges and uncertainty," Holliday said.
"As we look ahead, we are focused and committed to superior execution, maintaining our competitiveness and continuously adding value for our shareholders," he added.
Eli Lilly posts higher results, cuts outlook
INDIANAPOLIS, Oct. 23 (UPI) -- Drugmaker Eli Lilly and Co., citing strong sales of schizophrenia, said its third-quarter net income rose 2 percent to $738.5 million, or 68 cents a share, from $723.2 million, or 66 cents a share during the same period last year.
Analysts on Wall Street had expected the company to report a net income of 68 cents a share, according to Thomson First Call.
Sales fell 3 percent to $2.79 billion despite a 20 percent improvement in sales for schizophrenia drug Zyprexa to $974 million.
The company said the sales decline was due primarily to lower Prozac sales as a result of the August 2001 introduction of generic competition in the U.S. market and, to a lesser extent, continued declines in sales of anti-infectives and Axid.
Worldwide sales volume declined 3 percent and selling prices reduced sales by 1 percent, while exchange rates increased sales by 1 percent. Excluding Prozac, worldwide sales volume increased 6 percent.
Sidney Taurel, chairman, president and chief executive officer, said,
"This quarter marks a return to quarterly earnings growth for Lilly, and we are now through the period during which the Prozac sales decline triggered by generic competition in the United States had the greatest impact on our performance.
"Given the size of Lilly's sales base and the potential of our portfolio, we believe our opportunities are substantial. Several key products are delivering solid growth while our late-stage pipeline could deliver as many as 10 new products through 2005. We anticipate being able to provide more specificity regarding the new product approval and launch timelines as well as 2003 financial expectations when we receive the FDA's final conclusions and recommendations regarding our outstanding manufacturing issues," Taurel said.
Looking ahead, the company said it continues to expect a slight decline in sales for the full-year 2002.
However, the company's sales in the fourth quarter of 2002 are expected to return to growth and be in the mid-single digits, driven primarily by Zyprexa, Evista, Gemzar, Humalog and Actos.
For full-year 2002, the company said it expects earnings per share to decline, and the company is currently comfortable with a range of $2.55 to $2.57, excluding unusual items.
For the fourth quarter, the company expects earnings per share of 68 cents to 70 cents, excluding unusual items.
Eli Lilly said the lowering of the guidance for the full-year and fourth quarter is driven by the need to continue to make the appropriate investments in the business, including supporting Zyprexa and preparing for several new product launches, in order to implement Lilly's long-term growth strategy.
In addition, the company said sales from ReoPro and its older legacy products, such as anti-infectives and Axid, are trending lower than anticipated.
International Paper posts third-quarter profit
STAMFORD, Conn., Oct. 23 (UPI) -- International Paper Co., the world's largest wood and paper company, reported a third-quarter profit, reversing last year's loss, on cost cuts stemming from its restructuring.
International Paper, which has sold more than $3 billion in assets over the last two years to streamline its business, also said it expects earnings to improve once a more consistent and broad-based economic recovery kicks in.
The company reported a third-quarter net income including one-time items of $145 million, or 30 cents a share, compared with a loss of $275 million, or 57 cents a share during the same period last year.
The company said its latest results included a $4 million charge for severance, $5 million charge for asset impairment, and $1 million gain for adjustments to gains on previously sold businesses. Before items the company earned $153 million, or 32 cents a share.
Last year's results included a $2 million loss on assets of businesses held for sale and charges of $341 million for facility and business rationalizations and litigation reserves. Before items, the company earned $68 million, or 14 cents a share.
Wall Street analysts had expected the company to report earnings of 31 cents a share excluding items, according to Thomson First Call.
Sales slipped about 1.5 percent to $6.4 billion from $6.5 billion a year ago.
The sharp decline in the stock market and lower interest rates have impacted International Paper's pension plan and will cause a reduction in shareholders' equity of about $1.5 billion at year-end.
Cash flow won't be affected this year, and a funding study indicates that the probability of required cash contributions to the plan over the next several years is low, the paper company said.
International Paper said operating profit improved in the third quarter due to improved volume at printing papers in North America and containerboard.
By segment, printing papers third quarter earnings were $180 million, up from $106 million in the second quarter. Industrial and consumer packaging earnings fell to $128 million in the third quarter from $145 million in the second quarter.
Forest product earnings fell to $164 million from $204 million in the second quarter, due to lower wood products prices.
John Dillon, chairman and chief executive officer, said, "Despite a mixed third-quarter business environment, our third-quarter earnings are significantly higher than last year's levels.
"Profits are up vs. last year for three straight quarters, demonstrating the ongoing success of our internal programs and focus on our cost structure. We are well positioned for future earnings growth when the economy shows more consistent, broad based improvement," Dillon added.
