DuPont Lowers 2009 Forecast After 4Q Loss; Ag Still Strong
3 February 2009 Wilmington, Delaware, US-based chemical maker DuPont Co. reported a US $629 million loss for the fourth-quarter 2008. A $380 million restructuring program accounted for most of DuPont’s loss for the quarter, which totaled 70 cents per share, compared with a profit of $545 million, or 60 cents per share, a year ago. Full year 2008 earnings were $2 billion, down from $2.9 billion in 2007. Fourth quarter net sales fell 17% to $5.8 billion from $6.98 billion, as the company reported a 20% decline in volume. Higher prices in all regions and across all business segments were more than offset by volume declines and negative currency effects, reports the Associated Press.
Citing lower sales due to weak economic conditions and reduced consumer spending, the company cut its earnings forecast for 2009 to a range of $2 to $2.50 per share, down from its previous guidance of $2.25 to $2.75 per share. DuPont will also make further cuts to its contractor work force, which already involved releasing 4,000 contractors by the end of 2008; it plans to carve a total of 8,000 contractors from its rolls by the end of this month. The company previously cut 2,500 jobs, and will be eliminating merit salary increases this year and cutting work schedules for some employees, according to CEO Ellen Kullman "We’re attacking costs and expenses aggressively," Kullman said, adding that the benefits of the restructuring will be seen in the second half of the year.
While DuPont expects weak market conditions to continue throughout the year, Kullman said she is confident that DuPont will emerge from the current economic turmoil "stronger, leaner and more agile, and better poised for growth." The company said it expects very weak global demand for first quarter of 2009 in most key markets – excluding agriculture, which Kullman described as "the bright spot on the first-quarter volume horizon."
Jim Borel, group vice president in charge of DuPont’s agricultural businesses, said he expects continued volume growth in North American seed markets, and DuPont expects to continue "an appropriate level of spending" for high-growth, high-margin businesses, which includes seed products.
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