DuPont’s new interim CEO did not rule out the sale or split off of operations in his first earnings conference call.
Edward Breen said he will keep an open mind in finding ways to improve shareholder value. That will include cutting capital expenditures and corporate overhead without hobbling the company’s research and development work.
Breen, who had been elected to the board earlier his year, is the former CEO of General Instrument and Tyco, said he is more confident about the potential of DuPont after continuing to review opeations.
His appointment to the board and his new post came after a battle for board seats with activist investor Nelson Peltz.
Breen said he now working seven-day weeks in coming up with a cost-cutting plan for the company.
He said that unlike some situations he has encountered in his corporate career, he has found DuPont employees are determined to win and do a good job in working with customers.
Breen did not rule out splitting up the company or being a seller or buyer in the consolidation of the agriculture market. That market has been hit hard by problems in the key market of Brazil with long-time DuPont rival Dow opening the door to the possible sale of its agriculture unit.
Breen took over the post following the departure of Ellen Kullman this month. His remarks came after DuPont announced third quarter operating earnings of $0.13 per share compared with $0.39 per share in the prior year.
Third-quarter sales were $4.9 billion, down 17 percent versus prior year due to negative impacts from currency (8 percent), portfolio (1 percent), volume (7 percent) and local price and product mix (1 percent). Year-to-date sales were $19.8 billion, down 12 percent versus prior year due to negative impacts from currency (7 percent), portfolio (2 percent) and volume (3 percent).
“Amid the current challenging macro environment, our priority is to aggressively manage what is within our control, including taking a fresh look at DuPont’s cost structure and capital allocation strategy to identify ways to further improve shareholder return,” Breen stated.
“Addressing these areas even more intensely will put DuPont in a stronger position to capitalize over the long term on our unique science and leading positions in attractive growth markets while generating appropriate returns for shareholders in the near term.”
The company acknowledged that the shutdown of the LaPorte, Texas plant following an accident that took four lives, and at the Chambers Works, in nearby Salem County, NJ affected earnings.
The conference call contained no mention of former CEO Kullman, although there were continued references on the need to further focus on reducing overhead.
That is not good news for Delaware, the home of the company’s headquarters. DuPont, which had been stable on the employment front for a number of years has seen its share of turmoil of late. Earlier, DuPont spun off its Performance Chemical unit (Chemours), which recently closed the Edgemoor site near Wilmington.
The departure and what some have said was the ouster of Kullman came amid speculation that the board determined she was not moving fast enough in cutting costs and did not want to face another battle with Peltz.
