DuPont (NYSE:DD) will cut 1,500 jobs after the company reported losses in earnings during the third quarter of 2o12. The company also reduced its full-year outlook, due to weak demands for paint pigment and solar cells.
E I Du Pont De Nemours And Co (NYSE:DD) posted $10 million net income, or 1 cent per share, during the third quarter. The result was very low compared with its $452 million net income, or 48 cents per share during the same period last year.
E I Du Pont De Nemours And Co (NYSE:DD) (DuPont) third quarter profit, excluding significant items, declined from 60 cents per share a year ago, to 32 cents per share. The company’s earnings fell short of the 47 cents expectations of analysts, based on the data compiled by Bloomberg.
According to the company, its third quarter sales declined by 9 percent to $7.4 billion, due to the weak performance of its Electronics & Communications and Performance Chemicals segments, particularly in the Asia Pacific region. Dupont said, its revenue was reduced by 4 percent, due to foreign currency fluctuations.
DuPont said its work force reduction is part of its restructuring initiative to increase productivity, boost competitiveness, and growth. The company will cut jobs within the next 12-18 months, and expects to save $45o million pre-tax costs.
In a statement, Ellen Kullman, chairman and chief executive officer of DuPont said, “Today, we are taking additional actions to improve competitiveness and accelerate market driven innovation and growth, by fine-tuning the organization, eliminating costs, and expanding beyond our everyday focus on productivity.”
Dupont’s pretax operating income from performance chemicals was %372 million, a 37 percent decline due to slowing demand in titanium oxide such as fluoropolymers such as Teflon coatings. Kullman said, “Weaker than expected demand in titanium dioxide and photovoltaic markets contributed to the decline from last year’s record third-quarter earnings. We are addressing these challenges now to position ourselves for improved performance.”
Hassan Ahmed, an analyst at Alembic Global Advisors, commented that E I Du Pont De Nemours And Co (NYSE:DD) (DuPont) generated 60 percent of its incremental earnings growth from titanium dioxide since 2009. “If that’s cycling down, it seriously jeopardizes Ellen’s earnings growth target and has quite serious ramifications for 2013 and beyond,” according to Ahmed in a phone interview with Bloomberg
In August, DuPont signed a definitive agreement with Carlyle Group LP (NASDAQ:CG) to sell its Performance Coatings business for $4.9 billion in cash. The third quarter operational results of the Performance Coatings business were not included in the company’s earnings report, and it was classified as a discontinued operation.
Dupont reduced its 2012 earnings guidance from continuing operations to $3.25 to $3.30 per share.
Some of the companies that reported third quarter earnings below analysts expectation include H & M Hennes & Mauritz AB (STO:HM-B) and Texas Instruments Incorporated (NASDAQ:TXN).