Summary
E.I. du Pont de Nemours and Company (DuPont) reported a net loss of $873 million, or $0.88 per share, for the third quarter of 2003, a significant decline from the $469 million net income ($0.47 per share) reported in the same period last year. This loss was primarily driven by substantial separation charges and a goodwill impairment charge related to the planned sale of its Textiles & Interiors segment, totaling $1,314 million and $291 million pre-tax, respectively. Despite these charges, consolidated net sales increased by 12% to $6.1 billion for the quarter, driven by higher volumes, favorable currency impacts, and acquisitions across various segments. For the nine months ended September 30, 2003, DuPont reported a net income of $337 million ($0.33 per share), a significant improvement from a net loss of $1,453 million ($1.47 per share) in the prior year. This turnaround was largely due to the absence of a substantial cumulative effect of accounting changes seen in the prior year and improved operating performance in many segments, partially offset by the aforementioned separation and impairment charges in the current quarter. The company continues to navigate operational challenges, including rising raw material costs and pension expenses, while strategically positioning itself through divestitures and acquisitions.
Key Highlights
- 1Q3 2003 net loss of $873 million ($0.88/share) compared to a net income of $469 million ($0.47/share) in Q3 2002, heavily impacted by significant separation and goodwill impairment charges for the Textiles & Interiors segment.
- 2Nine-month net income of $337 million ($0.33/share) in 2003, a substantial improvement from a net loss of $1,453 million ($1.47/share) in the same period of 2002, driven by the absence of large prior-year accounting charges.
- 3Consolidated net sales increased 12% to $6.1 billion for Q3 2003 and 12% to $20.5 billion for the nine months, benefiting from volume growth, currency impacts, and acquisitions.
- 4Significant strategic action: DuPont is in negotiations to sell substantially all assets of its Textiles & Interiors segment, leading to the classification of related assets and liabilities as held for sale.
- 5Increased raw material costs and non-cash pension expenses are noted as significant factors impacting profitability across several operating segments.
- 6Acquisition activity is evident, including the consolidation of DuPont Canada and the formation of The Solae Company, contributing to sales growth.
- 7The company's net debt increased significantly from $2.7 billion to $8.3 billion between December 31, 2002, and September 30, 2003, primarily due to operational cash usage, acquisitions, and redemption of minority interest structures.