(Reuters) – Chemicals and seed producer DuPont’s quarterly profit topped analysts’ estimates as the company intensifies its cost-cutting efforts ahead of its merger with Dow Chemical Co.
DuPont said on Tuesday it was looking to cut its costs in 2016 by $730 million from 2015-levels.
The company’s previous cost-reduction plan, launched under former CEO Ellen Kullman, had pegged cuts at $1.3 billion by the end of 2016 from 2013 levels.
Both DuPont and Dow Chemical are streamlining their businesses, ahead of a merger that will create a company with an estimated combined market value of about $95 billion as of Monday’s closing.
“We are making progress on key initiatives, including further improving our cost structure and restructuring our organization to enhance our competitiveness,” DuPont CEO Ed Breen said in a statement, adding that the merger was on track.
DuPont’s cost-cutting measures, including a planned 10 percent reduction in its workforce of about 54,000 employees, will add about 64 cents per share to the company’s 2016 profit.
The company said it expects full-year operating earnings of $2.95-$3.10 per share, compared with analysts’ average estimate of $3.10 per share, according to Thomson Reuters I/B/E/S.
Excluding $622 million of restructuring and other charges, fourth-quarter operating profit was 27 cents per share, slightly above analysts’ average estimate of 26 cents.
The company said its cost-reduction efforts added 10 cents to its profit in the three months ended Dec.31.
Net loss attributable to the company was $253 million, or 29 cents per share, in the quarter, compared with a profit of $683 million, or 74 cents per share, a year earlier.
Net sales fell 9.4 percent to $5.3 billion.
Shares of DuPont, a Dow Jones industrial average component, have lost a quarter of their value over the last 12 months, closing at $52.99 on the New York Stock Exchange Monday.
(This version of the story corrects workforce number to 54,000 from 63,000 in sixth paragraph)
(Reporting by Amrutha Gayathri and Swetha Gopinath in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty)
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