Materials giant DuPont Co. will use almost all of the proceeds from an upcoming spinoff — one that includes its fluoropolymer and titanium dioxide businesses — to fund a massive $4 billion stock buyback.
Officials with Wilmington, Del.-based DuPont announced the move on Jan. 27 as the firm released full-year financial results for 2014. The firm's sales for the year fell 3 percent to $34.7 billion, while annual profit tumbled 25 percent to just over $3.6 billion.
The spinoff of DuPont's Performance Chemicals unit — including Teflon-brand fluoropolymer and the firm's titanium dioxide business — into a separate public company is expected to be completed by mid-2015. The new firm will operate as Chemours Co.
Full-year sales for 2014 in DuPont's Performance Materials unit — including nylon and other specialty resins, as well as nylon film — fell 2 percent to just over $6.1 billion, even as its operating profit grew 1 percent to almost $1.3 billion. Officials said that increase was due in part to increased demand from the automotive market.
DuPont also has increased its cost reduction target from $1 billion to $1.3 billion by the end of 2017. The firm's 2014 results “demonstrate continued progress on our strategic plan to deliver higher growth and higher value, including ongoing portfolio refinement through several strategic portfolio actions,” CEO Ellen Kullman said in a news release.
Activist investor Trian Fund Management LP continues to battle DuPont over alleged financial underperformance. On Jan. 8, the New York-based firm nominated four candidates for DuPont's board of directors.
Trian officials have said that in addition to the Chemours spinoff, DuPont should split itself into two separate firms, including one that would contain its Performance Materials unit.
On Wall Street, DuPont's per-share stock price was under $65 as recently as September, but had improved to close just over $74 on Jan. 26.