The wettest spring on record in parts of the United States is crimping profit at DuPont, the country’s largest chemicals producer, and affecting industries from packaging to construction.
DuPont said Thursday that its first-half operating profit per share will drop about 10 percent from a year earlier, compared with an April projection for a decline of 7 percent to 9 percent, because of the effect of wetter, cooler weather on its agriculture and nutrition and health units.
“While weather often seems more of an excuse than explanation, it is worth noting just how different the spring of 2013 has been versus a year ago,” analysts at Jefferies Group said in a note.
Deere last month cut its full-year equipment sales forecast after weather slowed demand for its construction and turf-care machinery in North America. Ball, a maker of food and beverage packaging, said last week that the conditions haven’t helped its business, with “softer” volumes continuing in the second quarter from the first three months of 2013.
About 17.67 inches of rain fell in Iowa, the biggest U.S. corn producer, from March 1 through May 31, the most in state records that began in 1873, said Harry Hillaker, the state climatologist.
Fargo, N.D., has had the wettest ever start to the year, according to state data going back to 1881.
“March to May 2013 has been the wettest spring in nearly 120 years across the farm belt states of Iowa, Illinois and Indiana,” Chief Financial Officer Nicholas Fanandakis said in DuPont’s statement.
— Bloomberg News
Fixed U.S. mortgages rose for the sixth straight week, putting the average rate on the 30-year loan just shy of 4 percent.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan increased to 3.98 percent. That is up from 3.91 percent last week and the highest since April of last year. The average rate was last at 4 percent or higher in March 2012.
The rate on the 15-year loan advanced to 3.10 percent from 3.03 percent. That is also the highest since April 2012.
Concerns that the Federal Reserve will scale back its bond purchases have pushed rates higher. Still, mortgage rates remain low by historical standards.
Cheap mortgages have helped sustain a housing recovery that began last year, encouraging more Americans to buy homes or refinance existing loans.
— Associated Press
l The Justice Department filed a joint lawsuit with Arkansas on Thursday against oil producer Exxon Mobil over the pipeline spill in March of thousands of barrels of heavy Canadian crude oil in a suburban neighborhood. The 95,000-barrels-per-day Pegasus line has been shut since spilling the oil in Mayflower, Ark., where cleanup operations continue. U.S. oil pipelines rarely spill in towns. Arkansas is seeking a judgment on Exxon’s liability for damages related to the spill of about 5,000 barrels that contaminated 22 homes, forcing residents to evacuate. An Exxon spokesman said the company has yet to review the allegations and had yet to be formally served with the complaint.
l Britain lost a third of its honeybee colonies during last winter, the highest rate since an annual survey began, after adverse weather last year prevented bees from leaving hives to seek pollen. The average loss rate jumped to 33.8 of every 100 colonies from 16.2 a year earlier, the British Beekeepers Association said Thursday on its Web site. Conditions may have deteriorated since the survey period ended March 31 because spring was delayed, it said. Pollination, mainly from honeybees, makes possible an estimated one-third of all food and beverages, the U.S. Environmental Protection Agency said this month.
l Best Buy is partnering with Microsoft to feature a store-within-a-store for its Windows products, the latest major consumer electronics retailer to acknowledge advantages of the brick-and-mortar format. The store-within-store will offer Windows-based PCs, tablets and accessories, as well as trained staff to explain Windows 8 to customers. Sales of Windows 8 products have gotten off to a slow start as the tile-format has confused some consumers, since it offers few signals about where to tap or click. The stores will be in 500 Best Buys in the United States and 100 Canadian stores. More than 1,200 Microsoft-trained workers will staff the kiosks. Best Buy has similar store-within-stores for Apple, Samsung and Magnolia products.
— From news services
l 8 a.m.: Producer Price Index for May released.
l 9:15 a.m.: Industrial production for May released.
l 9:55 a.m.: Consumer sentiment for June released.
l Earnings: Smithfield Foods.