DuPont to Cut 1,500 Jobs as Earnings Miss Estimates
DuPont reported quarterly earnings and revenue on Tuesday that ell short of analysts' expectations.
The chemical maker also said it is cutting 1,500 jobs, or about 2 percent of its 70,000 workers, and said it plans to take further steps to increase competitiveness.
The job cuts by the company, which also makes Kevlar bulletproof fiber and Corian countertops, marks one of the more extreme reactions to slipping demand and global economic uncertainty so far in this earnings season.
After the earnings announcement, DuPont shares fell in trading before the opening bell. (Click here to get the latest quotes for DuPont.)
The company posted third-quarter earnings excluding items of 44 ents per share, down from 69 cents a share in the year-earlier period.
Revenue fell to $7.34 billion from $9.24 billion a year ago.
Analysts had expected the company to report earnings excluding items of 46 cents a share on $8.15 billion in revenue, according to a consensus estimate from Thomson Reuters.
Earnings from continuing operations, however, were 32 cents per share, well below the consensus estimate. The reason for this is that DuPont's Performance Coatings business — which would have added another 12 cents to the bottom line — is being sold to Carlyle Group and thus the company listed it under "discontinued operations."
"Weaker-than-expected demand in titanium dioxide and photovoltaic markets contributed to the decline from last year's record third-quarter earnings," DuPont Chairwoman and CEO Ellen Kullman said in a statement. "We are addressing these challenges now to position ourselves for improved performance."
The company said it expects full-year 2012 earnings, excluding items, of $3.25 to $3.30 per share, compared with $3.55 a share a year earlier. Previously, the company had forecast full-year earnings of $4.20 to $4.40 a share.
Roughly half of the layoffs are due to the weak economy, and DuPont took a one-time charge of $242 million to pay out severance to workers. The other half of the layoffs are connected to DuPont's August sale of its slow-growing car paint business to investment firm Carlyle Group for $4.9 billion.
Carlyle did not need some legal, human resource and other support staff previously used by DuPont to manage the car paint business. DuPont took a $152 million charge in the third quarter for its plan to lay off some of those employees.
—Reuters contributed to this article