DuPont Details Weak Q2 Earnings Outlook; Cuts FY View - Update

(RTTNews) - Chemical company EI DuPont De Nemours & Co (DD), Thursday provided weak operating earnings outlook for the second quarter and slashed expectations for 2014, citing weakness at its agriculture segment and, to a lesser extent, performance chemicals business.

DuPont expects to record a restructuring charge of about $270 million pretax, or $0.20 per share, after tax, in the second quarter, mainly related to the separation of its performance chemicals segment, expected in mid-2015.

Wilmington, Delaware-based DuPont expects second-quarter operating earnings to be moderately below the $1.28 per share recorded last year. Analysts polled by Thomson Reuters currently expect earnings of $1.46 per share.

For the full year, DuPont now projects operating earnings of $4.00 to $4.10 per share, from prior range of $4.20 to $4.45 per share. Analysts currently expect earnings of $4.30 per share.

DuPont's agriculture business was impacted due to some weak corn seed sales and steep seed inventory write-downs. The company expects this to be a short-term negative trend.

The outlook also reflects lower than expected crop protection herbicide sales, largely due to weather.

Performance Chemicals second-quarter results is expected to be impacted by weak selling prices in refrigerants for mobile and stationary applications.

Throwing light on restructuring efforts, DuPont expects the separation of the performance chemicals segment in mid-2015. The initiative will deliver near-term savings from the movement and elimination of costs related to the separation as well as wide-ranging productivity improvements.

Also, an extensive redesign of DuPont's infrastructure will create a lower-cost systems environment and define new sources of savings.

"Together, all of these efforts will contribute to at least $1 billion in savings by the end of 2019 from a 2013 baseline," said Ellen Kullman, DuPont's chief executive officer.

DuPont stock closed Thursday at $67.70, down $0.12 or 0.18%, on a volume of 2.9 million shares on the NYSE. In after hours, the stock dropped $1.53 or 2.26% at $66.17.