Question-and-Answer Session
Operator
(Operator Instructions) Your first question is from David Begleiter of Deutsche Bank. Please go ahead.
David Begleiter - Deutsche Bank
Thanks Good morning. Chad and Erik, North American corn seed share why wouldn't it be up next year as opposed to just being flat year-over-year?
Erik Fyrwald
Well, what we're saying is that we are committed to being flat next year. Clearly, we're targeting to drive aggressively with the full supply of seeds that we're going to have in combination with the Herculex advantage.
And combination with the strengthened sales and marketing capability, and we are going to push all of those for 2008 and we'll see how we come out. I'm committed to turn the share around.
David Begleiter - Deutsche Bank
Erik, versus the 12% this year of triple stacks, what's the target for next year?
Erik Fyrwald
The target for next year for triple stacks and for corn rootworm trait product is to make sure that we've got enough product to meet the market demand.
Our estimate for the market demand of corn rootworm is about a third of the market next year, and we will have plenty of supply of triple stacks and other products to meet that demand.
Operator
Thank you. your next question is from P.J. Juvekar with Citi.
P.J. Juvekar - Citigroup
Yes, hi, Good morning. Your revenues were up 6% and EPS was up only 3% despite all the cost cutting, buyback and the tailwind from currencies. So you're not getting the positive leverage to the bottom line, which means, it may mean that your fixed costs are still too high. Can you comment on that?
Jeff Keefer
Yes, P.J. this is Jeff. The primary reason is for the lower operating leverage if you will, is the run-up in our variable costs. And you saw the $0.15 on our earnings per share chart and Carl, really reviewed by platform what that was.
Let me just comment on fixed costs. The fixed costs were as expected. They were not a surprise. They are a conscious reinvestment in our high growth, high return businesses that will pay off in the near term read that 2008.
We're putting more feet in the street in developing countries, launching new products and spending on capital and in places like Kevlar and Nomex, where we have customers that need more supply.
P.J. Juvekar - Citigroup
And one quick follow-up for Erik on the prior question, you said that your market share would remain flat next year or you hold it and you'll have enough supply available. What are you assuming for overall industry demand? How many acres of corn planted are you assuming for next year? Thank you.
Erik Fyrwald
We're not forecasting that specifically, but what I can tell you is that we are getting ready with the supply right now to be able to achieve our share gain, our share targets, regardless of how the acreage plays out, so it can increase and we will still hit our target.
Operator
Thank you. your next question is from Frank Mitsch with BB&T Capital Markets.
Frank Mitsch - BB&T Capital Markets
Good morning guys. Chad, it looks like globally, X-U.S, things are progressing very well. But obviously, the U.S. is a little bit of a disappointment, and you mentioned that perhaps you didn't move fast enough on the housing side.
What sort of expectations did you have for housing? How, in North America, how is it playing out? And when do you think it turns around, and what's your future there?
Chad Holliday
So first, I'm pleased the way our new products played in North America housing. We anticipated when we were putting our plan together last October we would start to see early restocking here in the second quarter for North American housing.
Clearly, that did not happen, as I mentioned in my comments, I'm not assuming anything improving in North America housing until sometime well into 2008, so no impact in 2007.
And we're taking these products to these developing countries where we've got the roots to market. And so that's why where we're beefing up, and that's some of our fixed cost, is beefing up in those roots to market.
And we're speeding up the cost reduction, particularly the cost reduction that's available in the United States from the streamlining. And that's why I'm so pleased we put in the basis to understand the systems of how to do it, so we know exactly how to take the resources that we'd be trying to sell and move more product in North America and put them up on the cost reduction piece.
Frank Mitsch - BB&T Capital Markets
All right. So you'll be able to improve your results, even without a market recovery?
Chad Holliday
Yeah. We'll be able to hit the outlook that we've given, which will be a strong second half for our Company, even without a market recovery in North America.
Operator
Thank you. Your next question is from Peter Butler with Glenhill Investments. Please go ahead.
Peter Butler - Glenhill Investments
Yeah. During the quarter, there was some discussion that in fact, Dow had made a takeover bid on DuPont, and I guess the question is, how did your Board handle this? The stock obviously has not been a good performer in recent years and it looks like maybe this rejected out of hand, something that could have added a lot to shareholder values.
Chad Holliday
Peter, we don't comment on rumors. I think if you look at our stock performance in the last 12, 15 months, I think it has performed quite well. Jackie?
Operator
Thank you. Your next question is from Bob Koort with Goldman Sachs.
Bob Koort - Goldman Sachs
Thank you. Good morning. Erik, I was wondering if you could help me a little bit with the math on your corn revenue, given you lost a couple share points, but the U.S. corn acreage was up something like 18%, 19%, and I think you mentioned that your trait intensity went up considerably. So it seems like your revenue base in corn should have gone up more, what am I missing in the math there?
Erik Fyrwald
Well, I said the revenue base went up over 20%.
Bob Koort - Goldman Sachs
Okay, I got you. I think it must have been the Herculex, that it was 12. And then -
Erik Fyrwald
Correct.
Bob Koort - Goldman Sachs
You mentioned next year, you expect double-digit selling price increases, but again, as you're going to have a trade intensity lift, so just by default, the mix will give you a price hike. What's the underlying trait fee increase, apples to apples, because I know your arch rivals in St. Louis have talked about something like a 15% or 16% increase going into '08.
Erik Fyrwald
Bob, the way we're looking at it is our total price for products are based on the value of the product, not specifically calling out a trait, and when you look at the performance improvement of our products, including the increased performance with the traits, our commitment is that our prices will be up double-digit next year.
If you look at our pricing, that's coming out now as we roll out the season, you will see that the product pricing is in line with that.
Operator
Thank you. Your next question is from Sergey Vasnetsov of Lehman Brothers. Mr. Vasnetsov, your line is live. Please proceed with your question. We'll move on to the next question, which is from Kevin McCarthy with Banc of America.
Kevin McCarthy - Banc of America Securities
Erik, despite the increases in the top line, the ag margins actually contracted in the first half of the year. I know you have some cost investments flowing through in R&D and sales and marketing. If I offset that with the higher pricing that you've alluded to for 2008, what would be your margin expectation or at least the trend, looking ahead to next year?
Erik Fyrwald
I think the trend looking ahead next year will be for improved margins. We will have a higher technology component, a significantly higher Herculex component and continued growth in corn, that I think all bodes well for our performance in 2008. We will continue growth investments. We will continue to strengthen our R&D capability. We will drive our pipeline into the marketplace very aggressively and continue that as well as continuing to strengthen sales and marketing.
On the other hand, our cost project, our $100 million cost reduction will start to deliver in the second half of this year about 20% of that cost reduction that we talked about in December last year, more than half of it in 2008, and then the full benefit in 2009 and beyond. So I think, it's a combination of driving growth, high value products, and our focus on costs that will deliver improved margins in 2008 and beyond.
Kevin McCarthy - Banc of America Securities
Just to follow-up on Herculex; you alluded to superior performance controlling black cutworms as well as western bean cutworms, can you quantify how prevalent that insect pressure is across the United States in terms of millions of acres and where you feel it gives you an edge?
Erik Fyrwald
Well, if you look at the chart, I believe it is ...
Chad Holliday
Slide 10.
Erik Fyrwald
Slide10. You can see the acreage that black cutworm and western bean cutworm cover. What this doesn't show, which we'll show you on August 14th and 15th, is how it's expanding, and also how corn rootworm is expanding. So the importance of these pests are getting more and more.
So the advantage of Herculex in controlling black cutworm, western bean cutworm and superior control of corn rootworm are going to get more and more important going forward, including in 2008. So we'll give you more specific data, both on how many acres this is hitting, how that's expanding, as well as our performance at August 14th and 15th.
Operator
Thank you. Your next question is from Steve Schuman with New Vernon Associates.
Steve Schuman - New Vernon Associates
Thanks. A quick clarification, your interest in corporate expense line is up a little bit and interest is down. So if I look at corporate expenses, it looks like it's up about $25 million. Am I looking at this wrong?
Jeff Keefer
Great question. The way you ought to look at it is interest expense is net of interest income, and that's about a wash year-over-year.
Steve Schuman - New Vernon Associates
Okay. And then, could you just update us on the progress for drought tolerant corn? Is this one area where you maybe able to catch up with your competitors? They recently had to partner away a lot of their profits here and the future potential for that product. How is your progress coming?
Erik Fyrwald
I would say in drought tolerant corn, we're making progress and we've got two approaches. One approach is through molecular marker breeding and improving our base germplasms ability to handle drought tolerance, and that's happening. It's making great progress, and it's delivering today.
You'll see that in our product lineup for 2008, the performance that we deliver in 2007. The other approach is transgenic. We're making good progress there with our own work, and in combination with our partners that we're working on this huge opportunity.
So, I would say we're making great progress. The timeline for commercialization is out 2011 and beyond, but it's a big opportunity and we're going to get there. But in the meantime, we're going to keep making more and more progress on improving the ability of corn to tolerate drought in our base germplasms.
Operator
Thank you. Your next question is from Don Carson with Merrill Lynch.
Don Carson - Merrill Lynch
Thank you. Chad, I have a portfolio question. There seems to be a lot of interest in engineering polymers these days, witness the G.E. sale and BASF's stated interest in the area. You've done a great job turning around Performance Materials, but does this business really fit with the R&D innovation strategy that DuPont has and don't you think there are higher value owners of this business?
And I would also ask about your Coatings businesses. You're further back on the turnaround there, but what are your thoughts overall on shrinking DuPont to a more of a higher growth Company than it is today?
Chad Holliday
Hey, Don. Thanks for the question. Of course, we have made some decisions around the business that we want to be in. As you know very well, synthetic fibers, we took exactly a lot of thought that you suggest there and concluded there's more value for our shareholders going a different direction.
In both Performance Materials and Coatings, we see tremendous potential in nanotechnology or nanoscience and engineering. You might have seen we've been leaders in pioneering the safety of this product and developing our capability.
We think this technology can add to both those platforms to create significantly more value, and we don't see other people that necessarily have the capability of doing that. Second, this streamlining and the DuPont Production System and Dupont Integrated Business Management, those techniques I described, we are thrusting them ahead first in these two platforms, where we expect to see significant value creation as those come in later this year and throughout 2008.
So there's a lot more value for shareholders right now in improving these two platforms. Of course, we're always going to do the right thing for shareholders in our total business mix.
Don Carson - Merrill Lynch
Okay. And then just a follow up for Erik. Erik, you talked about yield trials and the Pioneer yield advantage in '05 and '06. That was against all competitors. I'm just wondering if you can be more specific about Pioneer versus DeKalb and what advances you've made there and whether you're able to regain the yield advantage that Pioneer once had?
Erik Fyrwald
Well, of course, a huge number of those, a large number of those 19,000 trials were against Monsanto products, at least 5,000 of them. I think it was actually somewhat more than that. And our average yield advantage versus Monsanto was four bushels per acre, and that's improving. So they're clearly improving, we're improving, and we're going to keep doing that.
Operator
Thank you. Your next question is from Jeff Zekauskas with J.P. Morgan.
Jeff Zekauskas - J.P. Morgan
Hi, good morning. I don't mean to go over the Ag results yet again, but is the issue that the level of investment spending is just very, very large for the size of your business in the sense that the Ag operating profits really haven't grown since 2004.
And we've just had tremendously strong North American and global markets. So, what are the countervailing factors that are really keeping your operating profit growth down? And shouldn't you be holding yourselves to very high standards in terms of the rate of growth that you expect in the future?
Erik Fyrwald
Well Jeff, we'll go offline with you, go through the exact numbers since 2004. I do think we've delivered effective growth since 2004, since 2001, whatever starting point you want to take, although we did have a very tough year last year.
Jeff Zekauskas - J.P. Morgan
Sure.
Erik Fyrwald
The way I look at it is, the investments that we are making are very important to realize a lot of value both near term, midterm and long-term, and I think that you'll see that they'll pay off very, very well in 2008 as we turn around our North America corn share situation, as we sell a lot more Herculex product and continue our share gains in other markets.
And as we drive through the other elements of our pipeline which are near term, including not only Optimum GAT, which is going to be a huge driver of earnings improvement for us, both from the standpoint of better products, of stopping the royalty expenses that we're paying for glyphosate tolerance, and the ability to license trades and start getting significant licensing revenue.
That for Optimum GAT is very important for us. Rynaxpyr is launching next year. Anthracnose tolerance is launching next year. Hyolaic soy is launching in 2009, seed production technology is launching in 2009. And then behind that are the next generation agronomic traits around yield, drought and nitrogen.
I believe, the investments that we're making, both in R&D for all three of those horizons are going to pay off tremendously, and the commercial investments that we're making to strengthen our roots to market are also going to pay off very, very quickly.
And I think you'll see that the business continues to deliver very attractive revenue and earnings growth, while we continue to increase our investment for going after this huge opportunity going forward. The other thing in 2008, I'll just mention again, is we'll really start to see the $100 million cost reduction program start to kick in and deliver results. Put all that together, and we've got an attractive future ahead.
Jeff Zekauskas - J.P. Morgan
I guess, if I could follow-up maybe for Chad, you know, in the light of Monsanto's obvious success in being a focused agricultural company. Do you think, that over time it may be better to put the Ag and Nutrition business more on a freestanding basis so that the operation really can gain from an intense product focus, rather than be inside of a conglomerate?
Chad Holliday
Jeff, I think, I understand your question. But the bio-based materials, and I hope you can make it down in November when you see that, the overlap between that technology, and it's going to become very clear in biofuels, as we're seeing the lineup that we were around biofuels, we're seeing more into our Ag input and biofuels, there's going to be tremendous synergy, and no other company can bring that.
And, with 20% of the corn crop going to ethanol today, we have a unique advantage. And this fundamental kind of backbone of technology flows perfectly across Ag into bio-based materials. So, I believe when you see that between the Ag review in August and our bio-based materials, biofuels review in November.
I think, you'll answer the question why there is truly much more power for the shareholder being together. In addition, bio is very, very early in its overall evolution. We are confident in Electronics, in Safety and Protection, and other routes to market, we're going to be able to take the products of this technology and move it out.
So, I think as you see this play out, I believe it's going to become very clear that really having these multiple routes to market, and to get the full value of technology, it's much stronger than just a single norms are coming.
Operator
Thank you.
Carl Lukach
Okay Jackie, I think that concludes our time for today's call. I want to remind everyone that the Investor Relations team is here available to answer any follow-up questions that you have. And we thank you all again for joining us today. Thank you very much.
Operator
Thank you. This concludes today's DuPont conference call. You may now disconnect.
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