DuPont (NYSE:DD) may have hit the newswires just two days ago, but now it's back in a one-two punch of cost-saving news. On Monday, the company announced that it plans to cut 3,500 workers loose. Now, two days later, the company said things are good enough to raise first-quarter and yearly earnings forecasts.
It strikes me as strange that the company didn't release these pieces of information on the same day, and it smacks of the ping-pong strategy that has been discussed here in the past. After all, it's been going through a restructuring that has raised questions of whether DuPont knows which end is up, or what exactly it wants to be.
DuPont said today that it expects first-quarter earnings of $0.95 per share, excluding special items, as compared to previous outlooks of earnings of $0.65 to $0.75 per share. It raised its forecast for the year to $2.10 to $2.30 per share. These results beat analysts' previous projections.
The company said that it sees higher results on account of better-than-expected success in its agriculture and nutrition businesses, as well as higher volumes across the board.
A 6% layoff of a workforce may sound abysmal to some, and DuPont blamed high gas prices, and investors already had inklings of this back in the fall. However, layoffs were already part of the company's master plan to reap $900 million in cost improvement over the next year or two.
Investors applauded both actions with incremental increases to DuPont's share price on both pieces of news. Though the cost cutting may help DuPont's fortunes, whether the company has found itself yet remains to be seen.
Is DuPont due some increased respect with its restructuring efforts? Talk about it with other Fools on the DuPont discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
