By Chelsey Dulaney
DuPont Co. gave a disappointing outlook for 2015, saying its
earnings would take a significant hit from the strengthening
dollar, though the chemicals company indicated it would hit its
goal to cut $1 billion in costs well ahead schedule.
The company, which is facing pressure from activist investor
Trian Fund Management LP to split itself up, expects to post
per-share earnings of $4 to $4.20 a share for the year, below
analysts projections for $4.46 a share according Thomson
Reuters.
Shares declined 1.5% in light premarket trading but are up about
23% over the past 12 months.
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 would 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 up to $4
billion in shares.
For the quarter ended Dec. 31, DuPont said 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.
Sales in DuPont's agricultural business fell 4.1% to $1.73
billion. DuPont warned last year that the quarter's results could
be weighed by ongoing agricultural headwinds.
Sales in its safety and protection unit--which makes the medical
moon suits that have been used in Ebola treatment--fell 3.3% to
$943 million.
Total expenses fell 9.8% to $6.96 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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