DuPont's (DD) Earnings and Revenues Surpass Estimates in Q1

DuPont de Nemours, Inc. DD registered a profit from continuing operations of $183 million or 41 cents per share in first-quarter 2024. In the year-ago quarter, the company recorded a profit of $273 million or 58 cents per share.

Barring one-time items, earnings came in at 79 cents per share in the reported quarter, topping the Zacks Consensus Estimate of 65 cents.

DuPont's net sales reached $2,931 million, down 3% year over year. This result exceeded the Zacks Consensus Estimate of $2,816 million. The 6% drop in organic sales was caused by a 5% decline in volume and a 1% drop in price. Additionally, there was a 1% headwind due to currency fluctuations, partially offset by a favorable portfolio impact of 4%.

The reduction in volume was primarily caused by ongoing inventory destocking in industrial-based businesses, such as water technologies, particularly in China and medical packaging in the Safety Solutions business. The downside was somewhat mitigated by robust growth in electronic markets.

DuPont de Nemours, Inc. Price, Consensus and EPS Surprise

 

DuPont de Nemours, Inc. Price, Consensus and EPS Surprise

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

 

Segment Highlights

The company’s Electronics & Industrial segment recorded net sales of $1,365 million in the reported quarter, up 5% on a year-over-year comparison basis. It was above our estimate of $1,272.7 million. Organic sales fell 2% on reduced volumes and prices.

Semiconductor Technologies saw a 10% increase in organic sales, driven by the beginning of a recovery in semiconductor demand, normalization of customer inventory levels and the growing demand for OLED materials. Interconnect Solutions experienced a slight rise in organic sales, with mid-single-digit volume gains nearly offset by the effect of lower pass-through metals prices. In contrast, Industrial Solutions recorded a nearly 20% decline in organic sales, mainly due to continued channel inventory destocking for Kalrez parts and in the biopharma markets.

The Water & Protection unit recorded net sales of $1,291 million, marking an 11% decline from the previous year. This drop was primarily caused by a 10% fall in volume and a 1% adverse impact from currency fluctuations. Despite the year-over-year decline, this figure exceeded our estimate of $1,267.9 million.

Safety Solutions experienced a decline in organic sales in the low teens, primarily due to volume declines resulting from ongoing channel inventory destocking, with the most significant impact being generated by reduced demand for medical packaging in healthcare markets. Water Solutions saw an organic sales drop in the mid-teens, driven by lower volumes due to distributor inventory destocking and weaker industrial demand in China. Shelter Solutions remained flat on an organic-sales basis.

Financials

DuPont had cash and cash equivalents of $1,934 million at the end of the quarter, down around 60% year over year. Long-term debt was $7,776 million, down about 0.4% year over year.

The company generated operating cash flow from continuing operations of $493 million during the first quarter.

Outlook

DuPont revised its financial outlook for the year, increasing its projections for net sales, operating EBITDA and adjusted EPS. The company anticipates full-year 2024 net sales to be approximately $12.25 billion, operating EBITDA to be about $2.975 billion and adjusted EPS to be around $3.60 per share, based on the mid-point of the updated guidance.

For the second quarter of 2024, DuPont expects a sequential improvement in sales and earnings, attributed to favorable seasonal factors, continued recovery in the electronics sector and a decline in channel inventory destocking across industrial-based end-markets such as water and medical packaging.

Looking ahead to the second half of 2024, the company expects year-over-year sales and earnings growth, driven by ongoing recovery in the electronics market and a return to volume growth in the Water & Protection segment.

Price Performance

DuPont’s shares have increased 11.5% in a year versus a 4.1% decline of the industry

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

DuPont currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Gold Fields Limited GFI, sporting a Zacks Rank #1 (Strong Buy) and L.B. Foster Company FSTR and American Vanguard Corporation AVD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days.

L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents per share. The company’s shares have rallied 114.7% in the past year.

AVD is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report

Gold Fields Limited (GFI) : Free Stock Analysis Report

L.B. Foster Company (FSTR) : Free Stock Analysis Report

American Vanguard Corporation (AVD) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.