25 September 2008 14:24 [Source: ICIS news]
TORONTO (ICIS news)--DuPont’s new CEO Ellen Kullman, who will take over on 1 January, will likely focus on the company’s cost structures and options for its seeds business while any abrupt strategic changes are unlikely, analysts said on Thursday.
“We expect the incoming CEO to improve DuPont’s cost structure, to invest aggressively in the seed and crop protection platform, and to expand new product offerings in the emerging market regions,” JP Morgan said in a research note to clients.
However, structural changes such as the separation of the profitable seed business were not likely to be an initial first priority for her, the analysts said.
In a separate note, Deutsche Bank said Kullman’s appointment came a bit sooner than expected.
However, the transition had been anticipated and the bank did not expect abrupt changes in DuPont’s strategy as a result, it said.
Kullman’s key strategic challenges included acting on slower-growth businesses such as coatings, continuing to improve momentum and defend market share in the agricultural portfolio, and capturing the potential of DuPont's rapidly-developing applied biosciences portfolio, Deutsche said.
Meanwhile, JP Morgan lowered its 2008 earnings per share (EPS) estimate for DuPont by 10 cents to $3.50 due to the impacts of hurricanes Gustav and Ike on DuPont’s US Gulf Coast plants and a stronger US dollar.
“Good second-half 2008 agricultural results, offshore growth, and cost savings may not be enough offset these negatives relative to our estimate,” JP Morgan said.
The analysts also reduced their 2009 EPS forecast from $4.05 to $3.85 to reflect a stronger dollar and softer demand in the European end markets.
($1 = €0.68)
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