DuPont Forecasts Larger Foreign Exchange Hit as Sales Slip

DuPont Co. said the strengthening U.S. dollar will dent its earnings for the year more than it initially forecast in January, as the company also reported sales declines across all of its segments.

DuPont said it now expects currency to bring down its full-year results by 80 cents, above the 60 cent negative impact the company first estimated in January. The company still expects to come in at the low end of its guidance of $4 to $4.20 a share in earnings, however, as it ramps up cost cuts.

Separately, the company boosted its dividend by 4%.

The results come just weeks ahead of shareholder vote on adding nominees from activist investment firm Trian Fund Management LP to its board.

Trian says DuPont should slash bloated corporate spending and simplify its businesses to improve earnings growth--perhaps by splitting apart. Trian wants four board seats and is seeking to oust the heads of several key board committees. Trian's campaign has made DuPont one of the biggest companies to face such a proxy fight with an activist.

Meanwhile, DuPont has been 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 is planning to spin off its performance chemicals segment--best known for materials in nonstick frying pans and house paints.

DuPont said Tuesday that the spinoff is on track for the middle of this year.

Meanwhile, DuPont is struggling with the U.S. dollar's rise, which makes its seeds, chemicals and food ingredients more expensive for overseas buyers.

For the quarter ended March, DuPont said sales in its agricultural business fell 10% to $3.94 billion. Sales in its performance and chemicals division fell 14% to $1.36 billion.

Overall, DuPont reported a profit of $1.03 billion, or $1.13 a share, down from $1.44 billion, or $1.54 a share, a year earlier. Excluding pension costs and other items, operating earnings were $1.34 a share a share.

Net sales fell 9.4% to $9.17 billion, while total revenue slipped 7.6% to $9.37 billion.

Analysts polled by Thomson Reuters had expected a profit of $1.31 a share and revenue of $9.41 billion.

Total expenses were down to $7.77 billion from $8.34 billion a year earlier.

Write to Chelsey Dulaney at [e-mail]

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