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DuPont Cuts Full-year Earnings View, To Eliminate 1,500 Jobs; Shares Fall

DuPont 102312

Chemicals giant EI DuPont de Nemours & Co. (DD), commonly called DuPont, Tuesday cut its earnings outlook for the full-year 2012 and said it plans to eliminate about 1,500 jobs as part of restructuring.

The company also reported a sharp decline in third-quarter profit, that reflected lower revenues and customer claims, as well as restructuring and impairment charges. Both earnings and sales missed analysts' expectations. The shares dropped about 7 percent in pre-market trading.

DuPont Chair and CEO Ellen Kullman said, "Weaker than expected demand in titanium dioxide and photovoltaic markets contributed to the decline from last year's record third-quarter earnings."

For the full-year 2012, DuPont now expects earnings from continuing operations, excluding significant items, in a range of $3.25 to $3.30 per share. Earlier, DuPont forecast 2012 adjusted earnings to be toward the lower end of its outlook range of $4.20 to $4.40 per share.

Analysts are currently looking for earnings of $3.93 per share for the full year. This is in comparison to last year's comparable earnings of $3.55 per share.

DuPont said it has commenced a restructuring plan, which includes elimination of about 1,500 positions globally in the next 12-18 months. The restructuring, aimed to increase productivity, enhance competitiveness and accelerate growth, is expected to save nearly $450 million, of which $300 million will be in 2013.

During the quarter, Performance Chemicals segment sales dropped 19 percent to $1.7 billion The company said its Performance Coatings business, now pending divestiture, has been reclassified and reported as discontinued operations.

Agriculture segment sales increased 4 percent, while Electronics & Communications segment sales were down 28 percent from last year. In Industrial Biosciences, sales were flat with last year and Nutrition & Health posted 4 percent increase in sales.

In the third quarter, net income attributable to the company plunged to $10 million from $452 million last year. On a per share basis, earnings were $0.01, down from $0.48 per share a year ago.

Excluding significant items, earnings per share were $0.44. In the prior year, the company had posted adjusted earnings of $0.69 per share.

On average, 14 analysts polled by Thomson Reuters expected earnings per share of $0.47 for the quarter. Analysts' estimates typically exclude one-time items.

The company posted a loss from continuing operations of $0.05 per share, compared to earnings of $0.39 per share in the prior year. Excluding significant items, earnings from continuing operations were $0.32 per share, in comparison with $0.60 per share a year ago.

Significant items in the recent quarter were customer claims charge, restructuring charge and asset impairment charge totaling $0.37 per share.

Net sales for the quarter dropped 9 percent to $7.39 billion, reflecting 5 percent lower volume, 4 percent negative currency impact and a 1 percent net reduction from portfolio changes. This was partly offset by 1 percent higher local prices. Analysts estimated revenues of $8.14 billion for the quarter.

In the pre-market activity, DuPont was trading down more than 6.75% percent. The stock had closed Monday's regular trading at $49.76 on the NYSE.

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