NEW YORK — Cost containment programs that were undertaken last year, including massive job cuts in its nylon operation, helped profits of DuPont’s fiber unit, before nonrecurring items, to double in the fourth quarter ended Dec. 31.
DuPont’s fiber segment reported after-tax operating profit of $104 million, up from $52 million before a special charge a year earlier. The 1992 quarter included restructuring charges amounting to $69 million that resulted in a loss of $17 million.
Fiber sales in the latest quarter moved up 9.2 percent to $1.6 billion from $1.49 billion. In the year, fiber’s after-tax operating profits before nonrecurring charges slid 11.1 percent to $425 million from $478 million. After various restructuring charges, fiber’s net in 1993 was $169 million against $409 million in 1992.
The most recent year included a third-quarter writedown of $266 million for asset writedowns, employee separation costs, facility shutdowns and other moves.
Sales in the year edged up 1.9 percent, to $6.2 billion from $6.07 billion.
“While there was a general weakness in economies, especially in Europe, aggressive business management and cost savings are helping to improve margins and earnings,” a DuPont spokesman said.
This included the reduction of 2,900 employees in DuPont’s nylon business in the U.S. and Europe. The European layoffs, which totaled 1,600, were the result of the company’s purchase of ICI’s nylon business in July.
Fiber sales were flat in the U.S. in the quarter but showed “significant improvement” in Europe, he said.
The spokesman noted, however, that a stronger dollar against most European currencies continued to make comparisons difficult, and the European economy remains weak overall.
“While we have not seen clear signals of an economic upturn in Europe, at worst we’re at the bottom,” said the spokesman.
DuPont said the fiber unit’s decline in the year reflected lower earnings from Lycra spandex and nylon, particularly in Europe. U.S. fiber prices were flat in 1993, while prices outside the U.S. declined 9 percent, mainly due to a stronger dollar.
The 2 percent sales gain in the year principally reflected the additional nylon business acquired from ICI and was partly offset by lower nylon prices.
Overall, DuPont’s earnings improved to $226 million, or 33 cents a share, in the fourth quarter, against a loss of $230 million a year earlier. Excluding nonrecurring charges in both periods, earnings would have been 48 cents against 14 cents. Sales increased 1 percent, to $9.3 billion from $9.2 billion.
In the year, earnings were $555 million, or 81 cents a share, against a loss of $3.9 billion. Excluding special charges, earnings would have been $2.46, against $1.98 in 1992.
Sales dipped 2 percent, to $37.1 billion.
Edgar S. Woolard, DuPont’s chairman, said the overall earnings improvement in the year primarily reflected a turnaround in its petroleum segment. He said the company’s other businesses continue to benefit from reduced fixed costs, while at the same time they are hampered by weak economic conditions in Europe.
“We will continue with strong efforts to improve productivity and increase revenues, so that our businesses grow faster than the growth anticipated in global economies,” said Woolard.