DuPont to cut 1,500 jobs after 3Q profit slide

Associated Press Modified: October 23, 2012 at 12:15 pm •  Published: October 23, 2012
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DOVER, Delaware (AP) — The DuPont Co. said Tuesday that it will cut about 1,500 jobs and take other steps to increase competitiveness after weak demand for a key industrial pigment and uncertainty in the solar panel market led to a sharp drop in third-quarter earnings.

The chemical company, based in Wilmington, Del., reported net income of $10 million, or a penny per share, compared with $452 million, or 48 cents per share, for the same period last year. Excluding one-time items, DuPont earned 44 cents per share, compared with 69 cents per share for last year's third quarter. Revenue from continuing operations totaled about $7.4 billion, down 9 percent from $8.1 billion.

The results fell short of analysts' estimate of 46 cents per share, according to FactSet. DuPont shares were down nearly 9 percent in afternoon trading amid a broad market decline.

CEO Ellen Kullman attributed the disappointing results to weaker-than-expected demand for titanium dioxide — a whitening pigment used in products ranging from paint and plastics to toothpaste — and overcapacity and uncertainty in the market for photovoltaic solar energy products.

"I view that as two very specific issues," Kullman said. She noted that volumes were up by 3 percent year-over-year, excluding the business units that produce titanium dioxide and solar materials.

Edward Jones analyst Jeff Windau said that while third-quarter results were disappointing, DuPont continues to shift its focus to higher growth, higher margin businesses such as agriculture and nutrition and biotechnology.

"I think it's more broad economic issues than a company-specific issue," he said. "Overall, it was a rough quarter, but I think they are taking the necessary steps to move long-term into some of those faster growing businesses that will help them in the future," Windau added.

In the meantime, DuPont is working on a restructuring plan that Kullman said will deliver pretax cost savings of about $450 million. It includes eliminating some $230 million in residual costs related to the divestiture of its performance coatings unit and finding $220 million in savings in response to weak macroeconomic conditions.

Kullman said the restructuring includes eliminating about 1,500 positions globally over the next 12 to 18 months. The cuts involve streamlining headquarters and corporate staffs that supported the performance coatings unit, which produces automotive and industrial paints. It's being sold for $4.9 billion to The Carlyle Group, a private equity firm.

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