Wilmington, Delaware, USA
June 26, 2014
June 26, 2014 – Today DuPont announced that the company is revising its outlook for operating earnings per share for the second quarter and full year 2014, due primarily to lower than expected quarterly performance of its Agriculture and, to a lesser extent, Performance Chemicals segments. The company expects operating earnings in the second quarter to be moderately below the $1.28 per share recorded in the same period last year. As a result, the company is lowering its full-year outlook for operating earnings to $4.00 to $4.10 per share.
The revised outlook in Agriculture reflects lower than expected corn seed sales and higher than expected seed inventory write-downs. Given favorable soybean economics, soybean sales volumes in North America are higher than expected. However, the higher soybean volume will not fully offset the decline in corn volume, especially given the transition under way in the company’s soybean lineup to newer, higher performing products. The company believes this is a short-term negative trend, and there will be strong demand for its next generation soybean products. The revised outlook also reflects lower than expected crop protection herbicide sales, largely due to weather.
“While 2014 is a transition year in agriculture, the revisions to the outlook we made today do not meet the expectations we set for our Agriculture segment or for the company,” said DuPont Chair and CEO Ellen Kullman. “We have a strong global market position and a rich pipeline and we will make the necessary changes so that we return to our five-year track record of delivering the reliable, attractive growth our shareholders expect from this segment.”
Performance Chemicals second quarter results will be impacted by lower than expected selling prices in refrigerants for mobile and stationary applications.
Additional Details Provided on Company’s Redesign Initiative
Separately, DuPont disclosed more details today of its previously communicated efforts to streamline support for its more focused portfolio of businesses following the separation of the Performance Chemicals segment expected in mid-2015.
This redesign initiative will deliver near-term savings from the movement and elimination of costs related to the separation as well as productivity improvements across all businesses, regions and functions. Additionally, an extensive redesign of DuPont’s infrastructure, with a focus on automation and global standardization of transactional processes, will create a lower-cost systems environment and define new sources of savings as these changes are implemented broadly across the company.
“We have a unique opportunity now to reset our operating model to optimize both our effectiveness and efficiency, consistent with the purpose, strategy and needs of DuPont in 2015 and beyond,” said Kullman.
The company expects to record a restructuring charge of about $270 million pre-tax, or $.20 per share, after tax, in the second quarter of 2014 related to the first actions under the redesign initiative. The company anticipates that it will incur future charges related to the initiative as it implements additional actions.
“Together, all of these efforts will contribute to at least $1 billion in savings by the end of 2019 from a 2013 baseline – two-thirds by the end of 2015 on a run-rate basis and the final third occurring between 2016 and 2019,” said Kullman.
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