DuPont Co. (DD), the most valuable U.S. chemical maker, cut its 2011 earnings forecast by 10 cents a share because of falling demand for consumer electronics and plastics and continued weak demand for construction products.
Profit will be $3.87 to $3.95 a share, 10 cents lower than forecasts given last month, the Wilmington, Delaware-based company said today in a statement. Prior to the announcement, analysts expected profit excluding one-time items of $4.04, according to 18 estimates compiled by Bloomberg. DuPont fell 3.2 percent to $45.04 in New York.
“This certainly is going to last into the first quarter and possibly into the second,” Mark Gulley, an analyst at Ticonderoga Securities in New York, said in an interview. “Earnings growth is going to be back-end loaded in 2012.”
DuPont’s consumer electronics unit produces materials for semiconductors, circuits and flat-panel displays. Texas Instruments Inc. (TXN), a semiconductor manufacturer, yesterday forecast fourth-quarter revenue that was less than analysts’ estimates amid weaker demand for electronic components.
Chief Executive Officer Ellen Kullman said customers are using up inventories, which now are “very low.” That’s particularly the case in the polymers that DuPont sells to automakers, said Mike Hanretta, a company spokesman. Toyota Motor Corp. (7203) cut its profit forecast by 54 percent today for the year ending March 31 because Thailand floods disrupted output of Camry and Prius vehicles.
“We are seeing slower growth in certain segments during the fourth quarter, driven by global economic uncertainty,” Kullman said in the statement. “This uncertainty is contributing to ongoing conservative cash management in some supply chains.”
At DuPont’s annual investor meeting Dec. 13 in Wilmington, the company may forecast 2012 earnings of $3.95 to $4.05 a share because of reduced expectations for growth in electronics and in Europe and Asia, Laurence Alexander, a New York-based analyst at Jefferies & Co., said in a note today. DuPont is forecast to earn $4.35 a share according to the average estimate of 18 analysts in a Bloomberg survey. Citigroup Inc. cut its rating to “hold” from “buy” after DuPont’s announcement.
Alexander lowered his 2011 profit estimate by 10 cents a share his 2012 estimate by 20 cents. Gulley said his profit estimates are under review. Both analysts rate the shares “buy.”
Continued weak demand for housing and construction products affects sales of DuPont products such as Tyvek weather barrier and Corian counter tops.
DuPont acquired Danisco A/S in June for $7.1 billion to expand in food ingredients. That business and its agriculture unit are still “strong,” DuPont said today.
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