By Amrutha Gayathri and Sneha Banerjee
(Reuters) - DuPont (N:DD) is in M&A talks with rivals for its agriculture business, interim Chief Executive Edward Breen said on Tuesday, less than a week after Dow Chemical Co (N:DOW) announced a review of its farm chemicals and seeds unit.
Falling crop prices and rising fertilizer output have triggered talk of consolidation among farm-focused companies.
DuPont has been touted as a potential buyer of Dow's farm unit, but some have questioned if the company is in a position to do so.
Breen took over earlier this month after Ellen Kullman abruptly stepped down from her post.
Asked on a post-earnings call if DuPont was looking sell its farm unit, he said: "We will do what's right for our shareholders to create value for them."
Breen did not commit to a sale or a purchase at the farm unit, which accounted for 22 percent of DuPont's total revenue in the third quarter ended Sept. 30.
Nelson Peltz's Trian Fund Management, which lost a proxy battle for DuPont's board seats in May, has said DuPont can save $2 billion-$4 billion in annual costs by separating its volatile materials businesses from more stable businesses.
DuPont would take a "fresh look" at its "cost structure and capital allocation strategy," Breen said.
The chemicals and seed producer is already targeting about $1.6 billion in annual savings by 2017.
DuPont could raise its cost-cutting target by 10-20 percent, once it has "had a chance to do a more thorough operational review," said SunTrust Robinson Humphrey analyst James Sheehan.
Cost cuts contributed 10 cents per share to DuPont's third-quarter operating earnings of 13 cents, helping it beat the average analyst estimate of 10 cents.
Net sales fell 17.5 percent to $4.87 billion, missing analysts' average estimate of $5.3 billion.
DuPont expects full-year sales to fall by 11-12 percent, with sales falling in five out of six units in the current quarter due to a strong dollar.
The company, which gets about 60 percent of its sales from outside North America, said a strong dollar would reduce full-year operating earnings by 72 cents per share.
A strong dollar has chipped away 53 cents per share from DuPont's earnings so far this year.
This means operating profit in the current quarter will likely be reduced by 19 cents per share, more severe than the 17 cents impact noted in the third quarter.
DuPont's shares were up 1 percent at $61.13 in morning trade.