E.I. du Pont de Nemours & Co, the third largest US chemicals manufacturer reported a net loss of $629 million, or 70 cents a share a reversal on its fourth quarter 2007 performance when the company posted a earnings of $545 million, or 60 cents a share.
The Wilmington, Delaware based company cut its profit forecast range as the slowing global economy is seen to further impact demand for its products in the badly hit auto and construction sectors.
The company said, excluding costs from a restructuring program it would have lost 28 cents a share which is worse that what analysts had predicted at 20 cents a share for the latest period.
Du Pont has also revised downward its earning forecast for 2009 in a range between $2 to $2.5 a share as against the earlier projection of between $2.25 and $2.75 a share.
The forecast was reduced as the weak December demand has continued into January according to a company spokeswoman. The company has also exceeded its goal of cutting 4,000 contractors in a bid to reduce costs on expectations of continuing weak demand.
Ellen Kullman, the company's new chief executive said that they do not underestimate the difficulties presented by the current environment.
He added that for 2009 the company would deliver around $730 million in fixed cost reduction and about $1 billion in reduced working capital. He added that the company would capitalize on emerging opportunities in the current environment.
Du Pont's US sales plummeted 15 per cent to $1.9 billion on a 22 per cent decline in volumes while revenues dropped 20 per cent in Europe and slipped 13 per cent in Canada and Latin America. Sales suffered 15 per cent in the Asia Pacific region.
The loss in the agriculture unit, which makes pesticides and genetically modified seeds, nearly doubled to $164 million from $89 million a year earlier. Agriculture was the only segment to register an increase in full year earnings.
The loss in the coatings business was $65 million as against a profit of $216 million in 2007 in the same quarter. The loss in performance materials segment touched $129 million as against a profit of $186 million a year ago.
Electronics profit tumbled plunged 94 per cent on higher costs and weak demand in consumer electronics and automobiles.
Hypertension drugs Cozaar and Hyzaar contributed $265 million to earnings, a 7.7 per cent rise.
According to analysts DuPont's experience parallels that of the chemicals industry in general – weak and falling demand in auto-related businesses, in housing, construction and also in electronics.