Thursday, 4 December 2008

DuPont warns of quarterly loss, to cut 2,500 jobs

NEW YORK (Reuters) - Chemical maker DuPont (DD.N: Quote, Profile, Research, Stock Buzz) said on Thursday it expects to post a fourth-quarter loss and will cut 2,500 jobs as a steep drop in construction, car sales and consumer spending hurt its business.

The slump in the U.S. automotive markets has hurt DuPont badly, as it is one of the largest suppliers of paints to automakers. The Wilmington, Delaware-based company has also been stymied by the collapse in the U.S. housing market, as it supplies chemicals like Corian and Tyvek used in home building.

The freeze in the global credit markets, a recession in many developed economies and a sharp slowdown in many emerging regions have further crimped growth for DuPont and its peers, which have relied heavily on emerging economies for growth in recent quarters.

The company, whose shares fell 8.3 percent in premarket trade, said it was targeting cost cuts for 2009 of $600 million, up from its previous goal of $200 million.

That improvement is on top of $130 million in cost reductions expected from its restructuring plan that will result in a charge of $500 million in the fourth quarter.

DuPont expects a fourth-quarter loss of 20 to 30 cents per share excluding one-time items, a sharp turnabout from the earnings of 20 to 25 cents it previously expected.

Analysts has expected the company to post earnings of 23 cents per share in the fourth quarter, according to Reuters Estimates.


The chemical maker said the 2,500 job cuts, which represent about 4.2 percent of its workforce, will occur in businesses that service the automobile and construction markets in Western Europe and the United States.

DuPont is also cutting the jobs of 4,000 contractors by year-end 2008 with additional contractor reductions in 2009.

In addition, the company is implementing work schedule reductions at select locations, adjusting production to market conditions and redeploying more than 400 employees to projects aimed at lowering operating costs.

For 2009, the company said its earnings would be between $2.25 and $2.75 per share.

The planned job cuts would come mostly in businesses that support the motor vehicle and construction markets in Western Europe and the United States.

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