By Chelsey Dulaney
DuPont Co. said Tuesday that it would hit its goal to cut $1
billion in costs well ahead schedule, as the chemical company faces
pressure from activist investor Trian Fund Management LP to split
itself up.
DuPont, however, gave a disappointing outlook for 2015, saying
its earnings would take a significant hit from the strengthening
dollar. DuPont expects to post per-share earnings of $4 to $4.20 a
share, below analysts projections for $4.46 a share according
Thomson Reuters.
The outlook includes a negative currency impact of 60 cents a
share and came as DuPont reported results for its fourth quarter
that were in line with Wall Street expectations, although sales
fell across all segments.
DuPont's conglomerate structure and diverse business portfolio
have come under scathing attack from Trian over the past 18 months.
Trian, headed by Nelson Peltz, has argued the company's share value
could effectively double if it split itself into three--one aimed
at agriculture and nutrition, another for industrial materials and
a third for performance chemicals, which produces materials that go
into things like nonstick frying pans and house paint.
Trian disclosed earlier this month that it is seeking four seats
on DuPont's board.
Meanwhile, DuPont has been working on plans to cut $1 billion in
costs by 2020 and to shift away from lower-growth commodity
businesses toward higher-growth areas, such as nutritional products
and agriculture.
DuPont said Tuesday that it will reach its goal of $1 billion in
cost reductions by 2015 and would now aim for $1.3 billion in
overall savings by 2017.
As part of the effort, DuPont is planning to spin off its
performance chemicals segment--best known for materials in nonstick
frying pans and house paints--this year. DuPont said Tuesday that
it plans to use the proceeds of the spinoff to repurchase
shares.
For the quarter ended Dec. 31, DuPont said sales in its
agricultural business fell 4.1% to $1.73 billion. Sales in its
performance and chemicals division fell 6.4% to $1.56 billion.
Overall, DuPont reported a profit of $683 million, or 74 cents a
share, up from $185 million, or 20 cents a share, a year earlier.
Excluding certain items, operating earnings were 71 cents a
share.
Net sales fell 5.2% to $7.38 billion, while total revenue edged
up 1% to $7.92 billion.
Analysts polled by Thomson Reuters had expected a profit of 71
cents a share and revenue of $7.8 billion.
Total expenses fell 9.8% to $6.96 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Access Investor Kit for E.I. du Pont de Nemours & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2635341090
Subscribe to WSJ: http://online.wsj.com?mod=djnwires