Share this article

print logo

DuPont CEO defends strategy as Peltz calls for breakup

DuPont Co., under pressure from activist investor Nelson Peltz to break itself up, defended its conglomerate structure as one that will deliver “superior value.”

While Peltz’s proposals are partly aligned with DuPont’s strategic direction, each business gets competitive advantages from being part of the larger corporation, Chairman and Chief Executive Officer Ellen Kullman said Tuesday.

“Our board of directors, our management team and I are confident our plan will deliver sustained and superior value for our shareholders,” Kullman said on a call with analysts.

Kullman’s comments mark the first time she has defended her strategy since Trian Fund Management LP, the hedge fund founded and run by Peltz, last month stepped up its campaign for change at the biggest U.S. chemical maker by market value. Peltz published a letter calling for DuPont to be broken up and criticized the board for missing earnings targets.

In an interview, Kullman pointed to third-quarter results as evidence of the effectiveness of her strategy as she cuts expenses and focuses on new products. Net income rose to 47 cents a share from 30 cents a year earlier. Profit excluding some items was 54 cents a share, beating the 53-cent average estimate of 19 analysts in a Bloomberg survey.

“The third quarter reflects the momentum we are building as we execute our plan,” Kullman said by phone.

Kullman has announced measures to boost shareholder value since Trian acquired a stake in DuPont last year. DuPont plans to spin off its performance chemicals unit, eliminate $1 billion in costs by 2019, and buy back $5 billion of shares.

Trian wants DuPont split into two entities: businesses such as agriculture and nutrition, and other more cyclical operations such as performance materials and electronics.