Praxair Cuts Fourth Quarter Outlook, Eliminates 1,600 Jobs
From the Associated Press
Industrial gas supplier Praxair Inc. Tuesday cut its profit outlook for the fourth quarter and said it was implementing cost-cutting measures, including the layoff of 1,600 workers and closing underperforming and noncore product lines. The Danbury, CT-based company said demand for its products fell off in November, and it expects additional customer plant closings in December. The company plans to book pretax restructuring charges of about $120 million in the fourth quarter. The restructuring moves will save $80 million in fixed costs in 2009 and about $100 million annually afterward.
“We have moved quickly to take the necessary pre-emptive steps to make sure we have a cost structure appropriate to the current economic environment,” Chief Executive Steve Angel said in a statement. “The slowdown in commodity production and manufacturing has been unprecedented, and we believe customers are reducing inventory down the supply chain.” He said the company expects production to increase in 2009. It also has a large backlog of new projects coming on stream in 2009 and 2010 which will grow sales and earnings, Angel said.
Praxair also expects to take a $55 million pretax charge related to the settlement of a social tax case in Brazil dating back to the 1980s and increases in accruals reflecting recent developments for other cases. In total, the charge is expected to be about $175 million pretax, or about 37 cents per share, in the fourth quarter. Fourth-quarter earnings per share are now expected to be in the range of 95 cents to $1, excluding the charge. The company earlier had expected earnings of $1.03 to $1.08 per share, excluding one-time items.
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