Weaker Demand, Currency Headwinds To Weigh On DuPont Q3 Results?

(RTTNews) - Chemicals giant E. I. du Pont de Nemours and Company (DD) or DuPont Co. is slated to release its third-quarter results before the market open on Tuesday, October 27, with analysts, polled by Thomson Reuters, estimating earnings of $0.10 per share on revenue of $5.30 billion.

The just bygone quarter saw a decline in profit, reflecting lower sales and an adverse currency.

Second-quarter net income attributable to the company fell to $940 million from $1.07 billion reported a year ago. Earnings per share were $1.03, compared to $1.15 last year.

The latest results included charges, including $139 associated with transaction costs related to the separation of the Performance Chemicals segment.

Operating earnings per share was $1.18 for the quarter, while it totaled $1.17 per share in the prior year period.

On average, 12 analysts polled by Thomson Reuters expected earnings of $1.18 per share for the quarter. Analysts' estimates typically exclude certain special items.

Net sales declined to $8.6 billion from $9.71 billion last year, due to negative impacts from currency, portfolio changes, volume and local price and product mix. Analysts expected revenue of $8.75 billion for the quarter.

FY15 - Updated Guidance

Earlier this month, the company lowered its earnings forecast to $2.75 per share from the previously communicated outlook of $3.10 per share, largely due to continued strengthening of the U.S. dollar and a further weakening of agricultural markets, primarily in Brazil. Analysts are looking for earnings of $2.77 per share for 2015.

The new guidance assumes full-year currency impacts of $0.72 per share, versus the prior guidance of about $0.60 per share. Excluding the impact of currency, the revised guidance for full-year operating earnings per share, including expected benefits from share repurchases and cost savings, represents an about 3% increase in operating earnings per share year over year.

The company now expects second-half operating earnings per share to be about $0.40, compared to the prior guidance of $0.75. About 25% of expected second-half operating earnings will be earned in the third quarter. Prior year operating earnings were $3.36 and $0.96 per share for the full year and second-half 2014, respectively.

Financial Chief Nick Fanandakis said, "As macro conditions have deteriorated further, we are intensifying our effort to offset these pressures with further productivity improvements and cost savings, while making disciplined and targeted investments in innovation to increase value for shareholders over the long term."

In an effort to cope with the macro conditions, the company announced that it is accelerating, by one year, its operational redesign cost saving actions and as result, expects to achieve $1.3 billion of savings on a run rate basis by the end of 2016.

In addition, the company announced its commitment to achieving additional cost savings as a part of its operational redesign and is targeting about $1.6 billion on a run rate basis by the end of 2017.

While DuPont is experiencing challenging market conditions this season in Brazil, the company continues to see long-term strategic growth opportunities for its products. Over the long term, the company believes that its pipeline of new products and its portfolio of capabilities position it well in global agriculture markets.

DuPont also announced the retirement its Chairman and Chief Executive Officer Ellen Kullman. Edward Breen took over the role of Chairman and CEO on an interim basis, while the Board has appointed a recruitment firm to search for a full-time replacement.

October 8, DuPont and Caribou Biosciences, a leading developer of CRISPR-Cas technologies for genome editing, jointly announced a strategic alliance. Financial details of the deal remain undisclosed. As part of the agreement, DuPont and Caribou have cross-licensed their respective patent portfolios, with DuPont receiving exclusive intellectual property rights for CRISPR-Cas technology applications in major row crops, and non-exclusive rights in other agricultural and industrial bioscience applications.