By Frank Esposito, Crain staff (PN)
Wilmington Delaware -- Poor third-quarter financial results are leading plastics and chemicals giant DuPont Co. to cut 1,500 jobs in the next 12-18 months.
No details were available as to how the cuts would be split among various DuPont businesses. Officials said the job cuts and other moves would save the firm $300 million in 2013 and $450 million annually beginning in 2014. The cuts represent about 2 percent of the firm's global work force.
Third-quarter sales at Wilmington-based DuPont fell 9 percent to $7.4 billion, while profit plummeted almost 98 percent to $10 million, when compared to the same quarter in 2011.
Company officials cited shortfalls in titanium dioxide - a common pigment used to whiten plastics and other products - and in its photovoltaics business as reasons for the poor showing.
â€œToday, we are taking additional actions to improve competitiveness and accelerate market-driven innovation and growth by fine-tuning the organisation, eliminating costs and expanding beyond our everyday focus on productivity,â€ DuPont Chairwoman and CEO Ellen Kullman said in an Oct. 23 news release.
In an Oct. 23 conference call, investor relations vice president Karen Fletcher said that the firm's titanium dioxide and fluoropolymers businesses â€œwere pressuredâ€ by declines in spending in infrastructure and construction in the Asia Pacific region and by ongoing weakness in Europe.
She added that in the fourth quarter, DuPont â€œexpects continued softness while titanium dioxide producers reduce existing inventory levels.â€
Third-quarter sales in DuPont's Performance Chemicals segment - which includes titanium dioxide and fluoropolymers, but not elastomers, which fall under the Performance Polymers business - fell 19 percent to $1.7 billion. The unit's operating income tumbled 37 percent to $372 million.
DuPont's Performance Materials unit - including nylon and other specialty plastics - saw third-quarter sales fall 8 percent to $1.6 billion, even as its operating income shot up 32 percent to $306 million.
Fletcher attributed the unit's lower third-quarter sales to lower selling prices and currency, while its improved operating income resulted from several factors, including lower feedstock costs and continued productivity efforts.
For the first nine months of 2012, Performance Materials' sales fell almost 9 percent to $4.9 billion, while its operating income slipped about 1 percent to $762 million. The unit's sales total ranked third among DuPont's seven business units in the first nine months of the year.
The third-quarter shortfall sent DuPont's per-share stock price tumbling almost 10 percent to $44.90 in late trading Oct. 23.
From Plastics News (A Crain publication)
Press release from DuPont