UpdateDuPont sees continued weak demand, will cut further

21 April 2009 12:28  [Source: ICIS news]

(Releads and updates throughout)

By Nigel Davis

DuPont CEO Ellen KullmanLONDON (ICIS news)--Continued weak demand in non-agriculture markets will limit DuPont's sales growth in the second quarter and the full year, it warned on Tuesday.

The company revised downwards its full year earnings outlook as it reported operating losses in important business segments and no profits growth in the quarter apart from in agriculture.

A new round of cost cutting is being put in place in the face of what CEO Ellen Kullman called the “worst global recession since the 1930s”.

DuPont’s first-quarter net profits slumped 59% year on year to $488m (€376m) as most of its businesses continued to be badly hurt by the global recession.

The downturn continued to be broad and deep and was reflected in 20% lower quarterly sales for the company at $6.9bn.

Sales volumes were down 19% across the group and 30% in segments other than agriculture & nutrition, the company said.

The lower sales volumes principally reflected global declines in construction, motor vehicle production and consumer spending which was exacerbated by inventory de-stocking across most supply chains, the US chemicals major said in its first quarter earnings statement.

Agriculture & nutrition was the only segment to lift profits in the quarter. Losses were reported from performance materials; electronic & communications technologies; and coatings & color technologies. Profits for the company’s safety & protection businesses slumped 74%.

DuPont reduced its profits forecast for the year to a range of $1.70 to $2.10 a share. “Our teams are working with urgency and agility to stay ahead of the worst global recession since the 1930s,” CEO Ellen Kullman said.  

The company said it was increasing its 2009 fixed cost reduction goal to $1bn from $730m. In December, DuPont said it had indentified an additional $200m in cost reductions this year including an additional reduction in contractor positions and “work schedule revisions”.

Additional restructuring measures were expected to be finalised in the second quarter, it added.

($1 = €0.77)

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By: Nigel Davis
+44 20 8652 3214

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