But the Wilmington, Del.-based chemicals giant posted overall net income that was in line with analysts’ expectations and exponentially higher than last year’s figures, as a result of the hefty proceeds of the sale of the firm’s pharmaceuticals operation. Excluding that, earnings would have been down by 74.5 percent.
But in a conference call with analysts, company officials held out hope that the worldwide economy will start to pull out of the recession at some point this year, though they declined to guess when that might be.
“We expect…continued volume declines in the first quarter, especially outside of the U.S.,” said a spokeswoman. “Although we expect an inflection point during the year, it’s premature to call the quarter in which it will happen.”
At the company’s specialty fibers segment, which includes DuPont Apparel & Textile Sciences, after-tax operating income dropped by more than half to $66 million for the quarter ended Dec. 31, compared with $140 million a year earlier. That came on sales of $1.03 billion, which were down 10 percent. DuPont attributed 6 percent of that decline to slipping volume and 4 percent to falling prices.
The specialty fibers unit now includes substantially all of DuPont’s apparel-related businesses. The company said it has almost completed its divestiture and closing of its nonbranded polyester operations, with the exception of a filament joint venture with Unifi Inc.
Steve McCracken, president of the ATS operation, described fourth-quarter conditions as “Tough, real tough.”
“We’ve got an unstable business-to-business trade situation and we’ve obviously had some inventory depletion,” McCracken said. “Then consumer demand in the fourth quarter, though not as bad as some expected, was not robust.”
The U.S. textile industry in recent months has been rocked by major bankruptcies — including Burlington Industries and Malden Mills — and waves of plant closures at large and small textile operations. But McCracken said the bankruptcies have not taken a heavy financial toll on DuPont.
“We have been for the most part OK,” he said. “We’re exposed some, but a lot of what has been happening has been on the cotton-rich side of things.”
One sign of hope McCracken offered was an easing off of the intense price wars that have rocked the global spandex business in recent years. While prices remain low, he said, “I would expect the pace of change there has slowed.”
Much of DuPont’s recent spandex sales growth has come in generic product sold in the ready-to-wear sector, rather than with its branded Lycra product, though McCracken said the Lycra brand remains appealing to product managers looking for “differentiation.”
Last year, DuPont also started selling nylon fibers under the Lycra brand umbrella, one of the moves it had anticipated when it combined its apparel-related spandex, nylon and specialty polyester operations in ATS.
McCracken said some of the company’s new productions, including cotton-compatible spandex, performed well in the quarter. He added that, overall, the apparel inventory pipeline appears to be fairly clean, a good sign for business over the coming quarters.
“People are in an ordering position, those who are left,” he said. “But it’s been fairly bloody out there this past year.”
DuPont’s net income for the quarter was $3.92 billion, or $3.82 a diluted share, compared with $261 million, or 25 cents a share, in the prior-year quarter. Fourth-quarter 2001 results were boosted by $3.79 billion in one-time after-tax items — primarily the sale of the pharmaceuticals business. Prior-year results included $233 million in one-time after-tax items. Net revenues for the quarter were $5.35 billion, down 14.6 percent.
For the year, specialty fibers operating income was $356 million, down 50.9 percent. Sales for that division were $4.42 billion, down 10.9 percent.
DuPont’s net income for the year was $4.34 billion, or $4.16 a diluted share, up from $2.31 billion, or $2.19 a share, in 2000. Results for 2001 included $3.09 billion in one-time after-tax gains; 2000 results included $564 million in one-time after-tax charges. Net revenues for the year were $25.37 billion, down 13.1 percent.