WILMINGTON, Del. — Wall Street always watches with interest when a company as large as DuPont Co. reports earnings. That interest was even greater when the company released its 2014 earnings last week, since DuPont is the target of a high-profile proxy battle based on an investor’s belief that it could be more profitable by splitting itself into two or three smaller companies.
DuPont’s earnings report, released Jan. 27, reported operating earnings of $4.01 per share for 2014. That amount was on the low end of Wall Street analysts’ expectations. DuPont cited challenges for business in 2014, because of a weaker agriculture economy, a stronger dollar and a "difficult market pricing environment."
DuPont is divided into seven segments; agriculture, anchored by Pioneer seed sales, is the largest. DuPont reported $11.304 billion in agriculture sales for 2014, a 4 percent decrease from 2013. The agriculture division’s operating earnings were $2.4 billion for 2014, a 5 percent decline from the year previous. The company cited lower seed corn volumes and a negative impact of currency exchange rates as reasons for the decline in its agriculture division earnings.
An increase in crop protection product volumes for 2014 helped offset some of that decline, as did higher prices for some seed and some lower operating costs.
The earnings report comes as an activist investor is urging DuPont to split the company into at least two companies, one focused on agriculture and one on materials, such as DuPont’s Kevlar and Tyvek products.
Trian Fund Management LP is a hedge fund known for buying up company stock and then seeking seats on the corporate boards, to steer the company in directions preferred by Trian. Trian has nominated four people for seats on DuPont’s board, according to news reports. The board election will take place at DuPont’s annual meeting, held later this year.
DuPont reported it will present its slate of director nominees in the company’s proxy statement that will be mailed to all investors. Investors, no matter what size, can then vote for or against that slate.
