UpdateDuPont warns of weak first quarter after $629m Q4 loss

27 January 2009 13:11  [Source: ICIS news]

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By Nigel Davis

DuPont CEO Ellen KullmanLONDON (ICIS news)--DuPont warned of a weak first quarter and lower than previously expected profits in 2009 as it reported on Tuesday a $629m (€478m) loss for the fourth quarter.

The fourth quarter 2008 loss, including a $535m restructuring charge, was only slightly below that expected following DuPont’s profits warning in early December. The company said then that it would slash 2.500 jobs and implement further productivity measures.

DuPont said on Tuesday that it had seen sales decline in all regions with a 16% fall in emerging markets in the fourth quarter. Weaker demand across most markets for the diversified chemicals maker led to a drop in sales volumes of 20%.

DuPont saw sales and profits fall significantly in its industrial businesses. The loss in Performance Materials pre-tax operating income was $129m on sales down 30%. A Coatings and Color Technologies segment loss of $65m was driven by a substantial decline in volumes in all businesses and regions, DuPont said.

The company reported a loss of $164m in its Agriculture & Nutrition segment as costs rose but said it expected agriculture fundamentals to remain strong in 2009. 

The global recession was expected to continue in 2009 with “very weak” demand in most of its key markets excluding agriculture in the first quarter.

CEO Ellen Kullman said the company would make about $730m in fixed cost reduction and about $1bn in reduced working capital.

“We are acutely focused on executing with a sense of urgency across the company,” she added. Capital spending and other outgoings were better aligned with lower global demand, she said.

Revenue growth was expected to be limited in 2009, apart from agriculture, but DuPont said it would continue to invest in high growth, high margin businesses including seed products and photovoltaics.

The company’s 2009 profits guidance was revised downwards yet again with DuPont saying that weak industrial economic conditions were expected to continue.

Full-year 2009 earnings in a range of $2.00 to $2.50 share were forecast. The previous outlook was for full-year earnings of between $2.25 and $2.75 a share.

Full year 2008 earnings were $2.20 a share versus $3.22 in 2007, DuPont said. Excluding significant items, 2008 earnings were $2.78 a share versus $3.28 in the previous year.

First quarter 2009 earnings were expected in the range of $0.50 to $0.70 a share.

($1 = €0.76)

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By: Nigel Davis
+44 20 8652 3214



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