Tags: dupont | earnings | sales | agriculture

DuPont's Sales Trail Estimates as Agriculture Demand Weakens

Tuesday, 27 Jan 2015 07:20 AM

DuPont Co., the chemicals company facing a proxy contest with activist shareholder Trian Fund Management LP, posted fourth-quarter sales that missed analysts’ estimates as lower crop prices eroded demand for its agriculture products and the dollar strengthened.

Revenue fell to $7.38 billion from $7.75 billion, Wilmington, Delaware-based DuPont said in a statement Tuesday, compared with the $7.79 billion average of estimates compiled by Bloomberg. Net income rose to 74 cents a share from 20 cents a year earlier. Profit excluding some items was 71 cents, matching the average estimate of 16 analysts in a Bloomberg survey.

The company said 2015 operating earnings will be $4 to $4.20 a share, including a negative 60-cent impact related to the recent strengthening of the dollar. The average estimate was $4.44.

Average selling prices for products from DuPont’s agriculture business were down the most of any company unit. Lower grain prices have reduced farmer spending on seeds and pesticides.

Agriculture companies “continue to be negatively impacted by falling corn prices in the fourth quarter,” David Begleiter, a New York-based analyst at Deutsche Bank AG who recommends buying the shares, said in a Jan. 16 note.

The worse-than-expected results may hurt efforts by DuPont Chairman and Chief Executive Officer Ellen Kullman to defend against Trian’s campaign to seek four board seats. Trian has criticized Kullman’s failure to reach her goal of 12 percent annual earnings growth for three straight years and it argues that the 212-year-old company should be broken up.

Trian, which is based in New York, held a 2.7 percent stake in DuPont at the end of last year, and says the company can cut $4 billion in costs. While DuPont already plans to spin off its performance chemicals segment later this year, Trian advocates the rest of the company be split in two: one part that would include the faster-growing agriculture and nutrition units and another encompassing more cyclical businesses.

Kullman’s choice to fight Trian, saying shareholder returns outpaced major stock indexes since she became CEO in 2009, contrasts with industry peers Dow Chemical Co. and Air Products & Chemicals Inc., who have decided to work with activists.

At the same time, she has already implemented some of the recommendations made by Trian, including the of the DuPont Theater in Wilmington.

DuPont shareholders will vote to select the board at the company’s annual meeting in April.


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DuPont Co., the chemicals company facing a proxy contest with activist shareholder Trian Fund Management LP, posted fourth-quarter sales that missed analysts' estimates as lower crop prices eroded demand for its agriculture products and the dollar strengthened.
dupont, earnings, sales, agriculture
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2015-20-27
Tuesday, 27 Jan 2015 07:20 AM
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