DuPont Profit Slides on Weak Ag Market, Strong Dollar -- Update
27 Oktober 2015 - 3:27PM
Dow Jones News
By Lisa Beilfuss
DuPont Co. said profit nearly halved in the latest quarter, as
the chemical giant remained under pressure from weakness in
agricultural markets and from adverse exchange rates.
Shares fell 1.4% in early trading to $59.50, pushing the stock's
year-to-date loss to 15%.
"We are not pleased with our results this quarter," said Chief
Financial Officer Nick Fanandakis. "We saw significant negative
impacts from currency as well as market weakness in agriculture,
emerging market industrial production, and oil and gas."
Amid those headwinds, interim Chief Executive Ed Breen said
DuPont is taking a fresh look at its cost structure and capital
allocation strategy. Earlier this year, DuPont raised its
cost-cutting targets and said it would reach its goal of slashing
$1 billion in expenses by the end of 2015, ahead of schedule. In
the most recent period, the company said cost cuts added 10 cents
to per-share operating earnings, keeping it on track to report 40
cents a share in cost savings this year.
The maker of Pioneer corn seeds and Kevlar fibers earlier this
year defeated a campaign by activist investor Nelson Peltz and his
Trian Fund Management L.P. to secure seats on DuPont's board.
Trian, which has maintained its 2.7% stake, has expressed
dissatisfaction over DuPont's progress in meeting financial
targets.
DuPont has slashed its full-year earnings projection several
times this year, most recently at the beginning of this month. On
Tuesday, the company said it still expects to report an adjusted
$2.75 a share this year, which would reflect an 18% decline from
2014. Adverse currency rates are expected to shave 72 cents a share
off the bottom line this year, DuPont said, and the outlook also
reflects a further weakening of agricultural markets, primarily in
Brazil.
In the latest quarter, DuPont's operating loss in its Ag segment
ballooned to $210 million from $56 million a year earlier as
revenue slid 30% to $1.09 billion. DuPont isn't alone in grappling
with a softer ag market. Tractor seller Deere & Co., for
example, has been suffering from slumping commodity prices and said
profit tumbled 40% in its most recent quarter.
Sales across each of the company's operating and geographic
segments declined, with revenue from Latin America--dogged by
Brazil--dropping 33% to $769 million. The Brazilian economy,
plagued by slow growth and soaring inflation, has been blamed by a
host of other companies for weak results. Whirlpool Corp. has
struggled in that market, and on Tuesday engine maker Cummins Inc.
said it would slash jobs this year largely on account of weakness
in that country.
In the U.S. and Canada, revenue fell 9% to $1.58 billion.
Overall, DuPont reported a profit of $235 million, or 26 cents a
share, down from $434 million, or 47 cents, a year earlier.
Excluding certain items, earnings fell to 13 cents from 39 cents.
Revenue declined 17% to $4.87 billion.
Analysts projected 10 cents in per-share earnings on $5.30
billion in revenue, according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 27, 2015 10:12 ET (14:12 GMT)
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