Reuters

(Reuters)

Citing Soft Demand, DuPont Slashes '11 Forecast

By Industrials FOXBusiness

Hit by shrinking demand in the electronics industry and global uncertainty, chemical giant DuPont (DD) downgraded its 2011 earnings guidance Friday below Wall Street’s expectations and warned of a tough fourth quarter.

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The disclosure by the Wilmington, Del.-based blue-chip company sent its stock spiraling more than 6% into the red in pre-market trading.

DuPont said it expects to post non-GAAP EPS of $3.87 to $3.95 for 2011, down from $3.97 to $4.05 previously. Even the more bullish end of the new outlook, which represents an 18-20% year-over-year increase, would miss the Street’s view of $4.03.

“We are seeing slower growth in certain segments during the fourth quarter, driven by global economic uncertainty. This uncertainty is contributing to ongoing conservative cash management in some supply chains,” CEO Ellen Kullman said in a statement.

DuPont said the lowered outlook reflects “destocking across polymers and certain industrial supply chains that has accelerated” during the current quarter. In particular, the company pointed to further softening in demand for consumer electronics and to the still-weak housing and construction markets.

“We continue to drive our aggressive productivity initiatives, and, with customer inventories at very low levels, we are staying close to our customers to assure that we are ready to respond when demand returns," Kullman said.

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Still, DuPont said it anticipates posting 2012 earnings growth and will update investors on its full-year guidance next week.

The news slammed DuPont’s stock, which dropped 6.00% to $43.73 in recent trading and was already down almost 7% on the year as of Thursday’s close.

DuPont’s gloomier forecast comes after chip makers Texas Instruments (TXN) and Altera (ALTR) downgraded their fourth-quarter guidance due to tepid demand.

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