(Adds details, shares)
Jan 27 (Reuters) - DuPont, under pressure from activist investor Nelson Peltz to improve shareholder returns, said it plans to buy back up to $4 billion of its stock using a dividend expected from a spinoff of its performance chemicals business.
The company, which has a $5 billion repurchase program, also raised its cost reduction target by $300 million to at least $1.3 billion, expected to be realized by 2017.
DuPont forecast 2015 operating earnings of $4.00-$4.20 per share, including the performance chemicals unit. Analysts on average were expecting $4.46 per share, according to Thomson Reuters I/B/E/S.
Shares of the company, which reported a fourth-quarter profit that was in line with the average analyst estimate, were down 1.5 percent at $73 in light premarket trading on Tuesday.
DuPont's actions come after Peltz nominated himself and three other members of his Trian Fund Management LP to DuPont's board earlier this month, stepping up pressure on the company to break itself up.
Trian wants DuPont to separate its agriculture, nutrition and bio-sciences businesses from its slower-growing Kevlar body armor, Tyvek construction materials and other chemical divisions.
But DuPont has highlighted the "competitive advantages" in keeping its units together.
The company, which bought back $2 billion of its stock in 2014, is spinning off the performance chemical business, which makes materials such as Teflon.
The business named Chemours Co is expected to be listed on the New York Stock Exchange under the symbol 'CC'.
The share repurchases announced on Tuesday will be made over 12 to 18 months following the separation of Chemours Co, DuPont said.
Net income attributable to DuPont rose to $683 million, or 74 cents per share, in the quarter ended Dec. 31, from $185 million, or 20 cents per share, a year earlier.
Operating earnings were 71 cents per share, matching the average analyst estimate.
Net sales fell 5 percent to $7.38 billion, missing the average analyst estimate of $7.80 billion.
Up to Monday's close of $74.11, DuPont's shares had risen nearly 24 percent in the past 12 months on the New York Stock Exchange.
Reporting by Swetha Gopinath in Bengaluru; Editing by Sriraj Kalluvila