NEW YORK — Despite a massive downsizing and restructuring campaign getting under way, DuPont realized sizable gains for the fourth quarter and yearend.
This story first appeared in the January 28, 2004 issue of WWD. Subscribe Today.
For the fourth quarter ended Dec. 31, the Wilmington, Del.-based chemical giant saw earnings spike 81.7 percent to $636 million, or 63 cents a share, from $350 million, or 35 cents, in the prior year, while sales advanced 14 percent to $6.48 billion from $5.68 billion.
According to its quarterly report, income related to the sale of the company’s powerhouse textiles segment, Invista, to petroleum giant Koch Industries contributed a hefty 34 cents a share to the bottom line. The $4.4 billion deal is expected to close by the end of March.
Sales for Invista jumped 10.6 percent to $1.7 billion during the quarter from $1.53 billion in the year-ago quarter, accounting for 23.3 percent of sales among the company’s six business segments.
As reported, Steve McCracken, the charismatic executive who played a crucial role in the development of DuPont’s Lycra spandex business for most of the past decade, is stepping down from his role as head of Invista, after having been named president and chief executive officer in April.
After reaching a deal with DuPont in early November, Koch officials indicated that they planned to merge their existing KoSa polyester business into Invista, creating a $9 billion company that would be the world’s largest fiber maker. Weeks later, Koch officials said Jeff Walker, a 19-year veteran of the Wichita, Kan., company, would become Invista’s chairman and ceo after the deal closed.
Koch had intended to make McCracken president and chief operating officer, the number two job at the unit.
The Invista sale is likely the first of many sweeping changes as DuPont looks to reconfigure itself as a smaller entity. Earlier in the year, the company announced it was planning actions that would cut its annual costs by about $900 million starting in 2005, involving an unspecified number of layoffs and the relocation of some of its operations to lower-cost areas.
“This is the most significant infrastructure streamlining and focusing in this company’s history,” said chairman and ceo Charles O. Holliday in a conference call with financial analysts at the time.
For the year-end period, DuPont swung back into the black with earnings coming in at $973 million, or 96 cents a share, against a loss of $1.1 billion, or $1.11 a share, in 2002, while sales rose 12.5 percent to $27 billion from $24.01 billion.
Invista sales for the year grew 11.5 percent to $6.94 billion from $6.22 billion, and accounted for 23 percent of total sales.