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DuPont sees sales falling on strong dollar, weak farm demand

Chemicals and seed producer DuPont <DD.N> said it expects full-year sales to fall by 11-12 percent, hurt by a strong dollar and weak demand for pesticides and insecticides, particularly in Brazil.

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A sign at the entrance to the DuPont chemical plant reads "Safety is a core value" in LaPorte, Texas. REUTERS/Erwin Seba/Files.

Chemicals and seed producer DuPont <DD.N> said it expects full-year sales to fall by 11-12 percent, hurt by a strong dollar and weak demand for pesticides and insecticides, particularly in Brazil.

DuPont, which gets about 60 percent of its sales from outside North America, said net sales fell 17.5 percent to $4.87 billion in the third quarter ended Sept. 30, missing the average analyst estimate of $5.3 billion.

However, lower costs helped the company post a bigger-than-expected quarterly profit.

DuPont has speeded up cost cuts to counter weakening sales and to appease activist investor Nelson Peltz, who has criticized the company's cost structure and its inability to meet financial targets.

Cost cuts contributed 10 cents per share to third-quarter operating earnings of 13 cents, helping the company beat the average analyst estimate of 10 cents.

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"Amid the current challenging macro environment, our priority is to aggressively manage what is within our control, including taking a fresh look at DuPont's cost structure and capital allocation strategy to identify ways to further improve shareholder return," Edward Breen, DuPont's interim chief executive, said in a statement on Tuesday.

Breen, who took over after Ellen Kullman stepped down from her post earlier this month, is expected to take a more aggressive approach to cost-cutting.

DuPont is targeting about $1.6 billion in annual savings by the end of 2017.

The company's agriculture business was a major drag on third-quarter earnings as weak demand for seed and crop protection products in a competitive market hurt the business.

DuPont expects sales in the unit to fall by "low-teens" in percentage terms in the current quarter.

The strong dollar also contributed to the weakness in DuPont's agriculture business and weighed on four of its other five units.

Net income attributable to DuPont nearly halved to $235 million, or 26 cents per share, in the quarter ended Sept. 30.

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