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DuPont (DD) Gears Up for Q3 Earnings: What's in the Cards?

DuPont de Nemours, Inc. DD is scheduled to come up with third-quarter 2020 results, before the opening bell on Oct 29. The company is likely to have benefited from its cost and productivity actions in the quarter. However, its results are likely to reflect the impacts of weak demand across certain markets and lower nylon prices.

DuPont delivered an earnings surprise of 5%, on average, over the trailing four quarters. It posted an earnings surprise of 18.6% in the last reported quarter.

The company’s shares are down 8.9% year to date compared with 0.2% decline recorded by the industry it belongs to.

 


 

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for the third quarter for DuPont is currently pegged at $5,047 million, suggesting an expected year-over-year decline of 7%.

The Zacks Consensus Estimate for the company’s Electronics & Imaging segment is pegged at $962 million, reflecting a 6.3% rise on a sequential comparison basis. The consensus estimate for the Safety & Construction unit stands at $1,207 million, reflecting a 4.5% sequential increase. The same for the Nutrition & Biosciences division is pegged at $1,510 million, calling for a 1.9% decline on a sequential comparison basis. The Zacks Consensus Estimate for the Transportation & Industrial division stands at $1,040 million, reflecting a 25% sequential rise.

Factors to Watch For

Benefits of cost synergy savings and the company’s productivity actions are expected to get reflected on third-quarter results. The company sees roughly $180 million of savings in 2020 from its earlier announced incremental cost actions. Cost and productivity improvement actions are likely to have contributed to its bottom line in the quarter to be reported.

The company is also expected to have benefited, in the September quarter, from higher demand for products used in personal protection, food & beverage, water filtration, probiotics and electronics markets.

However, lower nylon prices are expected to have hurt its third-quarter sales. Nylon prices remain under pressure partly due to the supply-demand imbalance. The company is likely to have faced pricing pressure in the Transportation & Industrial division in the third quarter due to nylon headwinds.

Demand weakness across certain markets amid the coronavirus pandemic is also likely to have impacted the company’s top line in the third quarter. DuPont is seeing softness across certain markets such as automotive, aerospace, commercial construction, industrial and oil & gas. Sustained weakness in these markets is likely to have affected its third-quarter volumes.

Moreover, DuPont is idling certain facilities, primarily in the Transportation & Industrial segment, to align its supply with market demand. The company is likely to have faced some headwinds from costs associated with idling of plants in the to-be-reported quarter.

DuPont de Nemours, Inc. Price and EPS Surprise

 

DuPont de Nemours, Inc. Price and EPS Surprise

DuPont de Nemours, Inc. price-eps-surprise | DuPont de Nemours, Inc. Quote

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for DuPont this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
 
Earnings ESP:
Earnings ESP for DuPont is -1.09%. This is because the Most Accurate Estimate is currently pegged at 76 cents while the Zacks Consensus Estimate stands at 77 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DuPont carries a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Eastman Chemical Company EMN, scheduled to release earnings on Oct 29, has an Earnings ESP of +0.89% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman Corporation HUN, scheduled to release earnings on Oct 29, has an Earnings ESP of +13.51% and carries a Zacks Rank #2.

Newmont Corporation NEM, scheduled to release earnings on Oct 29, has an Earnings ESP of +1.90% and carries a Zacks Rank #2.

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DuPont de Nemours, Inc. (DD): Free Stock Analysis Report
 
Newmont Corporation (NEM): Free Stock Analysis Report
 
Huntsman Corporation (HUN): Free Stock Analysis Report
 
Eastman Chemical Company (EMN): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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