She said the company made the announcement Tuesday because it has reached the point where it needs to begin discussing options with outside advisers, strategists and potential investors.
"We decided to go public with the strategic alternatives that we are in the process of considering, because we have to engage both externally and internally with our people on the future," Kullman said. "It's hard to do that under a cloak of darkness."
Kullman said the decision to possibly spin off the unit was driven by DuPont's limited ability to create new growth opportunities for it. Though the unit has attractive financial strength and capacity to generate cash, Kullman said the unit has underperformed over DuPont business units over the last year.
"I want to emphasize that these are strong, healthy businesses, and our decision on whether or not to proceed will be guided solely by what presents the greatest value creation now and in the future for our shareholders, consistent with our mission to increase the value of DuPont," Kullman said.
While the performance chemicals unit covers several different products, the main drag on its performance was sluggish demand for titanium dioxide, of TiO2, a widely used whitening pigment used in broad range of products from automotive and house paints to toothpaste.
The performance chemicals unit's sales fell 9 percent as a 15 percent pricing decline offset a 6 percent volume gain. The unit generated total sales of $7.2 billion in 2012.
While TiO2 volumes increased 12 percent compared to last year's second quarter, operating earnings for the performance chemicals segment declined by $330 million, or 56 percent, from peak levels last year, largely because of lower prices for titanium dioxide.
Last summer, Kullman shrugged off short-term weakness in demand for TiO2, telling analysts that the overall fundamentals in the market were "robust." Chief Financial Officer Nick Fanandakis said at the time that DuPont was still "very bullish" on the mid- and long-term prospects for titanium dioxide.
"The market dynamics changed significantly in the third quarter of last year," Kullman said Tuesday, pointing specifically to economic conditions in China, a key market for TiO2.
For the quarter ending June 30, DuPont reported overall net income of $1.03 billion, or $1.11 per share, compared with $1.17 billion, or $1.23 per share, for the same period last year. Revenue fell 1 percent to $9.8 billion as lower selling prices and currency effects offset an overall 1 percent volume gain.
Wall Street analysts surveyed by FactSet were expecting higher earnings of $1.27 per share and revenue of $10.04 billion.
DuPont's announcement that it may shed the performance chemicals business appeared to partially offset worries about the financial performance for the quarter.
The company's shares closed down just 5 cents to $57.12 Tuesday after rising earlier in the day to as high as $60.40 per share -- its highest level since September 1999.
Corrected from an earlier version:
An earlier version of this story said the ownership of DuPont's Belle plant could change should executives decide to sell or spin off the performance chemicals unit. That was based on inaccurate information provided by the company.The story has been revised to reflect that while a significant portion of the production at the Belle plant supports the performance chemicals unit, it also provides products for DuPont's agricultural unit, which would not be affected by the proposed sale or spin off of the separate chemicals unit.
The Associated Press contributed to this report.
Contact writer Jared Hunt at busin...@dailymail.com or 304-348-4836.
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