DuPont cutting 1,500 jobs; slashes profit forecast

DuPont slashed its earnings forecast, reported a lower-than-expected quarterly profit and announced 1,500 job cuts on Tuesday, signs that demand for the chemical company's lucrative paint and solar products is slipping around the world.

Shares of DuPont, a component of the Dow Jones industrial average, fell nearly 8 percent in morning trading.

The job cuts by the company, which also makes Kevlar bulletproof fiber and Corian countertops, marks one of the more extreme reactions to slipping demand and global economic uncertainty so far in this earnings season.

DuPont's sales fell 9 percent to $7.4 billion in the third quarter, below analysts' average forecast of $8.15 billion.

Demand fell around the world, most sharply in Asia and Europe, hurt by higher prices for titanium dioxide, a key pigment used to make paint and a market DuPont dominates, and pastes used to make solar panels.

The company said it cut its 2012 capital expenditure budget by 10 percent to $1.9 billion to conserve cash.

Trying to reassure Wall Street, Chief Executive Ellen Kullman said management was "addressing these challenges now to position ourselves for improved performance."

The company posted third-quarter net income of $10 million, or a penny per share, compared with $452 million, or 48 cents per share, a year earlier.

Excluding one-time items, it earned 32 cents per share, while analysts on average had expected 46 cents, according to Thomson Reuters I/B/E/S.

The 1,500 layoffs around the world amount to about 2 percent of DuPont's 70,000-strong workforce.

Roughly half of the layoffs are due to the weak economy, the company said, and it took a one-time charge of $242 million to pay out severance to workers.

The other half of the layoffs are connected to DuPont's August sale of its slow-growing car paint business to investment firm Carlyle Group LP for $4.9 billion.

Carlyle did not need some legal, human resource and other support staff previously used by DuPont to manage the car paint business. DuPont took a $152 million charge in the third quarter for its plan to lay off some of those employees.

The sale is expected to bring in after-tax proceeds of $4 billion cash when it closes in the first quarter of 2013, DuPont Chief Financial Officer Nick Fanandakis said on a conference call with investors.

DuPont cut its 2012 profit outlook to a range of $3.25 to $3.30 per share, below the $3.93 expected by Wall Street.

Previously, the company expected to earn at least $3.79 per share, excluding the car paint business.

Shares of DuPont were down nearly 8 percent at $45.80 in morning trading.