DuPont Swings to 4Q Loss, Lowers 2009 Forecast

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DOVER, Del.DuPont Co. reported a $629 million loss for the fourth-quarter, reflecting a hefty restructuring charge, and lowered its earnings forecast for the full year due to weak industrial demand for its chemicals.

The Wilmington-based company said Tuesday its loss amounted to 70 cents per share, compared with a profit of $545 million, or 60 cents per share, a year ago.

Excluding a charge of $380 million, or 42 cents per share, from a previously announced restructuring program, the fourth quarter loss was $249 million, or 28 cents per share. That was a larger than the average 24 cents a share loss that analysts polled by Thomson Reuters expected.

Net sales in the quarter dropped 17 percent to $5.8 billion from $6.98 billion, as the company reported double-digit volume decreases in all regions and an overall volume decline of 20 percent. Higher prices in all regions and across all business segments were more than offset by volume declines and negative currency effects.

It said declines in consumer spending, construction and motor vehicle sales led to sharp drop in demand and a steep decline in global industrial production.

Full year 2008 earnings were $2 billion, or $2.20 per share, down from $2.9 billion, or $3.22 per share, in 2007.

Citing weak industrial economic conditions, the company revised its full-year earnings estimate for 2009 to a range of $2 to $2.50 per share, down from its previous guidance of $2.25 to $2.75 per share.

"DuPont enters 2009 addressing challenging economic conditions head-on," said Chief Executive Officer Ellen Kullman. "We are intensely focused on productivity, while generating earnings and cash... We do not underestimate the difficulties presented by the current environment."

For the final quarter of 2008, volume dropped 22 percent in the United States and 20 percent in the Asia Pacific region, with 19 percent declines in Europe and the Canada-Latin America region.

Among the company's business segments, sales in the performance materials unit were off 30 percent to $1.2 billion as volume dropped by almost a third amid weak global demand. A significant increase in dollar pricing, along with seed market share gains in Latin America, helped limit the drop in sales in the agriculture and nutrition unit to 2 percent, with sales totaling $1.2 billion.

The company said it expects global economic conditions for first quarter 2009 to be similar to those in the fourth quarter, with very weak demand in most key markets, excluding agriculture. DuPont said it expects to continue "an appropriate level of spending" for high-growth, high-margin businesses, including seed products and photovoltaics.

"We are acutely focused on executing with a sense of urgency across the company," said Kullman, adding that the company will deliver about $730 million in fixed cost reductions and about $1 billion in reduced working capital for 2009.