Against the backdrop of a slowly strengthening U.S. economy, chemical firms saw earnings slide again in the third quarter, in large part because of rapidly declining prices. Out of 21 firms tracked by C&EN, Dow Chemical, DuPont, and eight other companies reported lower sales and earnings in the quarter compared with last year.
The results prompted promises by chief executive officers to heighten the cost-cutting moves they have been implementing throughout the postrecession recovery. As they announced financial results, Dow CEO Andrew N. Liveris and DuPont CEO Ellen J. Kullman unveiled additional restructuring plans, including layoffs, to be implemented in the fourth quarter and beyond (C&EN, Oct. 29, page 7). Then, one week after Dow’s Oct. 23 announcement, the company amended its tally of layoffs, saying it will cut 3,000 positions in the next two years, an increase of 600 from the original statement and equal to 6.3% of the firm’s workforce.From Ann Thayer, same thing goes for the pharma companies:
For the third consecutive quarter, no relief came as combined sales and earnings declined at the major pharma companies tracked by C&EN. Overall, quarterly sales fell 5.0%, and earnings for the companies that reported them dropped 9.1%. For the first nine months of the year, sales were down 3.0%, while earnings declined 5.4%. By comparison, in the first half of 2012, sales slipped just 2.1% and earnings were down 3.5%.
Four companies reported double-digit drops in sales, and five had similar-sized slides in earnings. Hardest hit was Bristol-Myers Squibb. Its third-quarter sales plummeted 30.1% to $3.7 billion, and earnings dropped by an even larger 34.3% to $685 million. U.S. patents expired in March on its high blood pressure drug Avapro and in May on the blood thinner Plavix. Excluding these two products, the company’s sales were up 7% compared with the third quarter of 2011.Does anyone foresee another round of layoffs from Big Pharma? By now, I can't see how they could cut more (he said naively.)