(Reuters) — DuPont says the rest of the year will be “challenging” as a strong U.S. dollar and persistently weak demand for its farm products continue to chip away at sales.
The chemical and seed company also cut its full-year profit forecast because to the weak outlook and to account for the spin-off of its performance chemicals unit.
The company lowered its full-year operating earnings forecast to $3.10 per share from $4 per share: 80 cents due to the spin-off and 10 cents due to weak agricultural sales.
DuPont, whose sales have missed analysts’ expectations for the last four quarters, has also been hit by a strengthening American dollar. The company gets 60 percent of its overall sales from outside the United States.
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The company is speeding up its cost-reduction program to combat the impact of weakening sales, and in January raised its cost-reduction target by $300 million to at least $1.3 billion by 2017.
“We fully expect to continue to find additional opportunities that will take us beyond the $1.3 billion of cost reduction,” chief executive officer Ellen Kullman said.
Weak global demand for crop protection products, reduced corn acreage in Latin America and lower soybean volumes in North America are weighing on DuPont’s farm business, which accounts for slightly more than one-third of total sales.
DuPont clocked lower sales in all its six ongoing businesses in the second quarter ended June 30 and forecast lower sales in the current quarter as well.
The company expects sales in the agriculture business to fall the most in the current quarter — in the “mid-teens” in percentage terms — which is steeper than the 11 percent fall in the latest quarter.
Consolidated net sales fell 11.5 percent to $8.60 billion, missing analysts’ average estimate of $8.75 billion, according to Thomson Reuters.
Net income attributable to DuPont fell 12 percent to $940 million.
