Global Economic Slowdown Affects DuPont Second Quarter Earnings
Press release from the issuing company
July 03, 2001 As reported Monday in a Flash edition of DuPont News, DuPont has announced that it estimates earnings per share for the second quarter, before one-time items, to be between USD 0.35 and USD 0.45. Earnings in the second quarter of 2000, before one-time items, were USD 0.90 per share.
"The global economic slowdown that has forced U.S. manufacturing capacity utilization to levels equal to the 1982 recession is now expanding to Europe, South America and parts of Asia," said DuPont Chairman and CEO Chad Holliday. "Demand is correspondingly weak across all markets, and our customers have continued to draw down existing inventories or delay purchasing until conditions improve."
Chad also observed that "the strength of the U.S. dollar -- at its highest point in 15 years -- presents huge competitive challenges for U.S. exporters, many of whom are DuPont customers."
DuPont has taken a number of significant actions to offset the effects of the slowing economy and position its businesses to deliver sustainable earnings growth. In April, the company announced a restructuring plan to reduce its global workforce by 4 percent that will begin to yield cost reductions in the second half of 2001. In addition, DuPont will hold capital expenditures for 2001 to USD 1.6 billion, down from previous estimates of nearly USD 2 billion.
"Recent movements in long-leading economic indicators and in raw material prices offer hope that an end to the spreading global downturn is in sight," Chad said. "Despite that, we continue to take actions necessary to emerge from these difficult times as a much stronger company."
During the quarter, the company broadly communicated its view of changing macroeconomic trends which, combined with historically high costs of key raw materials, were affecting financial performance. DuPont second quarter performance reflects these external trends, a number of which worsened as the quarter progressed.
DuPont will report its second quarter earnings on Wednesday, July 25.
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