Shares in chemicals maker DuPont (NYSE:DD) were up before the bell Wednesday after the company last night authorized a $1 billion share buyback program and said 2012 earnings will come in at the high end of forecasts.
The buyback, expected to be completed next year, is subject to receiving the proceeds from the sale of its perfomance coatings unit.
The company also updated its 2012 earnings outlook to be at the high end of the previous range of $3.25 to $3.30 per share, excluding items.
Chair and CEO, Ellen Kullman, said: "Our fourth quarter performance is as expected and at the high end of our previous guidance. I am pleased that our board authorized a significant stock repurchase program. This program reflects our confidence in the underlying fundamentals of our business as well as our commitment to deliver value to our shareholders.
"The buyback delivers meaningful near-term value with the remaining proceeds from the divestiture providing us the ability to further strengthen our balance sheet, preserving our flexibility to invest in selective growth opportunities."
DuPont also announced its outlook for 2013 earnings, which it expects will grow low-to-mid single digits, with sales rising in the low-single digits.
The forecast is based on the view that all of its segments will have solid earnings growth compared to 2012, except performance chemicals, which is expected to be down "substantially", with margins declining six to seven percentage points in 2013.
"While we are seeing indications that market conditions are firming up in some areas, volatility and uncertainty also persist," said Kullman. "Our current outlook calls for our 2013 earnings to grow low- to mid-single digits over 2012 as the investments we are making in agriculture and nutrition, industrial biosciences and advanced materials continue to deliver results offset by the weakness in titanium dioxide markets.
"We will provide more specific guidance with our fourth quarter earnings report."
In October, DuPont said that it would shed 1,500 jobs and take other steps to increase competitiveness after third-quarter earnings fell sharply. The restructuring plan will deliver pretax cost savings of about $450 million by eliminating costs supporting the performance coatings unit and taking additional steps to improve competitiveness. The plan also includes eliminating about 1,500 positions globally over in the next 12 to 18 months.
Shares in the chemicals maker rose 2.7 per cent prior to market open, to $44.87.