UPDATED — Ellen Kullman is stepping down as CEO and chairman of DuPont Co. on Oct. 16, while the Wilmington, Del.-based chemical giant has decreased its earnings outlook for the year.
Edward Breen, who led Tyco International out of bankruptcy and joined the DuPont board of directors earlier this year, was named interim chairman and CEO.
“With a strong foundation in place, now is the right time for a new leader to continue to drive the pace of change to capitalize fully on the opportunity ahead,” the 59-year-old Kullman said in an Oct. 5 news release.
In the same release, DuPont noted that it expects its earnings per share for the full year to be $2.75, down from prior guidance of $3.10. It blamed the strengthening of the U.S. dollar vs. currencies in emerging markets, particularly the Brazilian real. The value of the real has dropped 60 percent year-over-year compared to the dollar. DuPont also put part of the issue on Brazil's weakening agriculture sector.
Kullman has been with DuPont for 27 years and has been its CEO since January 2009. She led the company as it spun off its fluoropolymers and titanium dioxide business into a separate public company, Chemours, earlier this year.
Kullman also won a proxy fight in May with activist investor Trian Fund Management LP and its founder Nelson Peltz. During that proxy fight, DuPont named Breen and James Gallogly, the former CEO of LyondellBasell Industries NV, as independent directors to the board.
As interim CEO and chairman, Breen is “well suited to lead the company while the board completes its search for the next executive to lead DuPont,” said Alexander Cutler, lead independent director on the DuPont board, in a statement.
Kullman had been the first female CEO in DuPont's 213-year history. Her DuPont career included a four-year period in the 2000s where she increased sales at the firm's Safety & Protection business from $3.5 billion to $5.5 billion.
But as CEO, Kullman was not able to meet investor expectations. The recession also took a toll on the firm's work force. DuPont in December 2008 — the month before Kullman took office — announced 2,500 job cuts. It announced 2,000 more cuts in May 2009 and 1,500 more in October 2012.
“Ellen Kullman and DuPont were able to fend off divestiture pressures from Nelson Peltz and Trian for a while,” said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis. “But DuPont seems to have recognized that revising their 2015 earnings forecast downward was bound to have consequences, and they decided to act proactively by replacing Kullman with Edward Breen as interim CEO.”
Karig added that “the only real question at this point is whether elevating Breen, who is well known for breaking up Tyco International, signals that DuPont is now fully on board with divesting major portions of the company in order to avoid continuing shareholder pressures.
“Absent a strong earnings turnaround, DuPont is likely to be a very different company, or more precisely very different companies, a year from now,” he said.
In the first half of 2015, DuPont's sales fell 10 percent to $17.8 billion, with profit down 21 percent to just under $2 billion. For full-year 2014, DuPont's sales fell 3 percent to $34.7 billion, as profit tumbled 25 percent to just over $3.6 billion.
The firm's per-share stock price also has had a rough year on Wall Street, beginning the year near $70 but standing at $55.20 in late trading Oct. 7 — a decline of 21 percent.
DuPont ranks as one of the world's largest producers of specialty chemicals and plastics, including a market-leading position in nylon.
