Wilmington, DL, January 11, 2006—DuPont has cut its earnings guidance for the fourth quarter on hurricane-related operational disruptions as well as weak sales and higher costs in three of its businesses.
Shares in DuPont fell more than 3 percent in pre-market trading on the news and weighed on the broader market. It was the second time in about three months that DuPont lowered analysts' expectations for its results in the fourth quarter, citing the effects of hurricanes Katrina and Rita.
"Management is under scrutiny to execute. We believe that they can--we're just waiting for it to happen," said Gene Pisasale, analyst with Mercantile Trust in Baltimore, which has $25 billion under management.
DuPont said a lower-than-expected tax rate will only partially offset the shortfall, leading to earnings of about 10 cents per share in the quarter. DuPont previously forecast earnings of 20 to 25 cents, and analysts polled by Reuters Estimates, on average, expected 24 cents.
DuPont becomes the latest raw materials company to indicate that Katrina and Rita, though long passed, continue to significantly affect operations.
Earlier this week, Alcoa (Research) posted a disappointing profit as the hurricanes continued to weigh on both production and materials costs, and oil major BP Plc said the hurricane-related shutdown of the Texas City, Texas, refinery and other storm damage cost it $1 billion in lost profit and repairs.
Lower-than-expected sales and higher-than-expected costs in crop protection chemicals, performance coatings and surfaces also hurt results in the quarter, DuPont said, though it did not quantify the impact
