US DuPont’s Q3 net income down sharply to $10m, begins restructuring

23 October 2012 12:00  [Source: ICIS news]

US DuPont’s Q3 net income down sharplyLONDON (ICIS)--DuPont’s third-quarter net income fell sharply to $10m (€7.7m) from $452m reported in the same period in 2011, as sales fell through poor demand, the US major chemicals and science based group said on Tuesday.

Third-quarter net sales for the three months ended 30 September were $7.4bn, down 9% year on year, primarily reflecting volume declines in the group’s Electronics & Communications and Performance Chemicals segments, particularly in Asia Pacific.

DuPont added that company sales reflect 5% lower volume year on year, a 4% negative currency impact and a 1% net reduction from portfolio changes, which were partly offset by 1% higher local prices.

With the earnings announcement, the company's chair and CEO, Ellen Kullman, announced that DuPont has commenced a restructuring plan to increase productivity, enhance competitiveness and accelerate growth, which includes eliminating about 1,500 positions globally in the next 12-18 months.

DuPont expects the plan to deliver pre-tax cost savings of about $450m by eliminating corporate costs supporting Performance Coatings and taking additional cost-cutting actions to improve competitiveness.

“Today, we are taking additional actions to improve competitiveness and accelerate market driven innovation and growth by fine-tuning the organization, eliminating costs and expanding beyond our everyday focus on productivity,” said Kullman.

We continue to execute well in many parts of the company, and certain segments are outperforming despite market volatility,” Kullman added.

The CEO said that weaker-than-expected demand in titanium dioxide and photovoltaic markets contributed to the decline from last year's record third-quarter earnings.

“We are addressing these challenges now to position ourselves for improved performance,” Kullman said.

In addition, the company said it remains on track to achieve its full-year 2012 productivity targets for both fixed costs and working capital.

DuPont expects its full-year 2012 earnings from continuing operations, excluding significant items, to be in a range of $3.25-3.30/share. Prior-year earnings were $3.55/share on a comparable basis.

($1 = €0.77)

By: Franco Capaldo
+44 (0)20 8652 3214

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