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DuPont pulls ahead of Street
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October 21, 1998: 11:56 a.m. ET
Chemical maker posts $605M net loss on operating income of 67 cents per share
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NEW YORK (CNNfn) - DuPont Co. pulled just ahead of Wall Street's third-quarter estimate, but told shareholders Wednesday it expects global market pressures to continue.
The Wilmington, Del.-based chemical maker posted a net loss of $605 million, or 54 cents a diluted share, for the quarter ended Sept. 30. That compares with a loss of $17 million, or 2 cents a share, last year.
The most recent net loss includes a $1.21 per share charge for nonrecurring items. Specifically, DuPont took an 18 cent per share charge for early redemption of debt, 83 cents per share for the write-off of acquired research and development, a 23 cent charge for productivity improvement initiatives and a 3 cent gain on the sale of assets.
On an operating basis, DuPont earned 67 cents per share, a penny above analysts' consensus estimate, according to First Call.
Analysts expected DuPont to earn 66 cents a share, according to First Call consensus estimates.
Revenue during the quarter reached $6 billion, up from $5.8 billion last year. Excluding a sales gain of $695 million from acquired businesses, however, the company's sales fell 5 percent below last year's level.
"The combination of lower demand from weakening global economies, lower oil prices and the negative impact of a strong U.S. dollar on selling prices resulted in a decline from record third-quarter earnings last year," said DuPont President and Chief Executive Charles O. Holliday, Jr. "We are responding directly to these difficult business conditions by intensifying our previously announced productivity actions, which include reduction of employment costs, rationalization of assets and our increased emphasis on cost-effective raw material sourcing."
During the quarter, DuPont completed its acquisition of Merck & Co.'s interest in DuPont Merck Pharmaceutical Co. and launched Sustiva, a new drug for the treatment of HIV and AIDS.
The company also announced the planned fourth-quarter sale of its remaining interest in coal operations.
Chemical segment earnings were up 6 percent for the quarter at $161 million, while fibers segment profits were 12 percent below last year at $234 million.
DuPont's Life Sciences division was hit the hardest as earnings plummeted 60 percent to $48 million, from $121 million in 1997. Agricultural products earnings slipped largely due to bad debt expense for Brazil, Eastern Europe and Russia, and last year's change in inventory stocking previously held on consignment.
"With the expectation of a challenging global economy in 1999, we intend to maintain our emphasis on productivity while we continue to aggressively focus our businesses," Holliday said.
For the nine months, DuPont reported earnings of $1.26 billion, or $1.09 per diluted share, down significantly from $2.14 billion, or $1.86 per share, last year.
Late last month, DuPont said it will offer a 10 percent to 20 percent stake in its Conoco oil and gas unit to the public this year and spin off its remaining interest to shareholders next year.
The tax-free spin-off is expected to close within 12 months and will mark DuPont's exit from the energy business.
In the most recent quarter, Conoco's operating income slipped to $220 million from $295 million last year.
(Click here for a chart of DuPont's stock activity)
Shares of DuPont (DD) were down 1-7/16 at 62-3/4 in midday trading on the New York Stock Exchange Wednesday, down from their 52-week high of around 84 per share in June. 
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DuPont
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