By Chelsey Dulaney
DuPont Co. said Tuesday that the strengthening U.S. dollar will
dent its earnings for the year more than it forecast in January, as
the company also reported sales declines across all of its
segments.
DuPont said it now expects currency to bring down its full-year
results by 80 cents per share, above the 60 cent negative impact
the company first estimated in January. The company still expects
to come in at the low end of its guidance of $4 to $4.20 a share in
earnings, however, as it ramps up cost cuts.
Shares of DuPont rose 0.3% to $73.05 in premarket trading, as
the company boosted its dividend by 4% and reported earnings that
came in above Wall Street expectations for the first three months
of the year.
The results come just weeks ahead of a shareholder vote on
adding nominees from activist investment firm Trian Fund Management
LP to its board.
Trian says DuPont should slash bloated corporate spending and
simplify its businesses to improve earnings growth--perhaps by
splitting apart. Trian wants four board seats and is seeking to
oust the heads of several key board committees. Trian's campaign
has made DuPont one of the biggest companies to face such a proxy
fight with an activist.
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.
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.
DuPont said Tuesday that the spinoff is on track for the middle
of this year.
Meanwhile, DuPont is struggling with the U.S. dollar's rise,
which makes its seeds, chemicals and food ingredients more
expensive for overseas buyers.
For the quarter ended March 31, DuPont said sales in its
agricultural business fell 10% to $3.94 billion, weighed by an 8%
currency impact and a 5% decline in volume. DuPont cited reduced
global corn planted area and lower insecticide demand in Latin
America.
Many agricultural companies have been hurt recently as farmers
have opted to plant soybeans over corn. Sales in its performance
and chemicals division fell 14% to $1.36 billion amid a 3% currency
impact and a 6% drop in volume.
Overall, DuPont reported a profit of $1.03 billion, or $1.13 a
share, down from $1.44 billion, or $1.54 a share, a year earlier.
Excluding pension costs and other items, operating earnings were
$1.34 a share a share.
The company said the impact from currency hurt its per-share
earnings by 25 cents.
Net sales fell 9.4% to $9.17 billion, while total revenue
slipped 7.6% to $9.37 billion.
Analysts polled by Thomson Reuters had expected a profit of
$1.31 a share and revenue of $9.41 billion.
Total expenses were down to $7.77 billion from $8.34 billion a
year earlier.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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