By Jacob Bunge
DuPont Co. (DD) is scheduled to announce third-quarter financial
results before the market opens Tuesday. Here's what to watch
for:
EARNINGS FORECAST: DuPont is expected to earn 51 cents a share
in the third quarter, according to analysts surveyed by FactSet
Research, compared with 28 cents reported a year earlier. The
company said in July it expects to earn $1.25 to $1.35 a share in
the second half of 2014, with 40% of that figure coming in the
third quarter, working out to 50 cents to 54 cents a share.
REVENUE FORECAST: $7.95 billion in revenue is forecast, compared
with $7.74 billion reported in the prior-year period.
WHAT TO WATCH:
-DEFENDING THE VISION: DuPont's corporate structure and business
portfolio came under scathing attack last month by activist
investment firm Trian Fund Management LP, which argued that the
company's share value could effectively double if it split itself
into two companies--one focused on agriculture and nutrition, the
other on industrial materials. Watch for DuPont to spotlight the
tangible and less-tangible virtues of their "integrated science"
approach to research and product development, and why scientists
developing solar-panel pastes and soybean seeds can benefit one
another.
-PAY ON THE FARM: A longer-term challenge to DuPont and other
suppliers of seeds, pesticides and fertilizers is the hit to
farmers' paychecks following two years of sliding grain prices
driven by back-to-back bumper crops. The U.S. Agriculture
Department in August forecast that domestic farm incomes will fall
13.8% this year to their lowest level since 2009, forcing crop
producers to review spending on supplies. Listen for any outlook on
DuPont's pesticide portfolio, as farmers in the U.S. South and
Midwest battle growing hordes of weeds that can't be killed by some
widely used sprays such as Monsanto Co.'s Roundup.
-CHEMICALS LITE: More details may come on DuPont's plan to cut
$1 billion in costs by 2020, with two-thirds pledged to come by the
end of next year. The company's streamlining operations alongside
the planned spinoff next year of its performance chemicals unit,
which makes household paint and Teflon, but Trian's criticism of
what it says are $2 billion to $4 billion in annual costs at DuPont
add gravity to the company's efforts. When DuPont announced the
plan in June, it also warned of potential future charges related to
the plan.
Write to Jacob Bunge at jacob.bunge@wsj.com
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