DuPont Earnings Rise But So Do Headwinds -- Update

By Chelsey Dulaney 

DuPont Co. said earnings jumped 52% in its third quarter on lower expenses, despite ongoing softness in the chemical giant's agriculture segment.

Still, the company warned of sluggish economic growth, currency impacts and ongoing agricultural headwinds for its current quarter.

DuPont's corporate structure and business portfolio recently came under scathing attack from activist investment firm Trian Fund Management LP, which argued that the company's share value could effectively double if it split itself into two companies--one focused on agriculture and nutrition, the other on industrial materials.

Meanwhile, DuPont is already working on plans to cut $1 billion in costs by 2020 and to shift away from lower-growth commodity businesses toward higher-growth areas, such as nutritional products and agriculture. As part of the effort, DuPont last year said it plans to spin off its performance chemicals segment--best known for materials in nonstick frying pans and house paints.

DuPont said Tuesday that the separation of the unit remains on track for mid-2015.

For the quarter ended Sept. 30, volume grew across nearly all of DuPont's segments, with the only decline coming in its agricultural business, where higher crop protection volume was more than offset by lower seed volume.

Sales in the agricultural segment fell 4% to $1.56 billion, while the operating loss in the segment narrowed to $55 million.

Sales in DuPont's nutrition and health segment grew 4%, while sales in the performance chemicals division fell 8%.

Overall, DuPont reported a profit of $433 million, or 47 cents a share, up from $285 million, or 30 cents a share, a year earlier. Excluding certain items, operating earnings increased to 54 cents a share from 45 cents a share. Net sales fell 2.9% to $7.51 billion due to portfolio changes, while total revenue edged up slightly to $7.87 billion.

Analysts polled by Thomson Reuters had expected a profit of 53 cents a share and revenue of $7.95 billion.

Total expenses fell 6.5% to $7.08 billion in the quarter

The company reiterated its earnings outlook for the year.

Write to Chelsey Dulaney at [e-mail]

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