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Why Is DuPont de Nemours (DD) Up 4.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for DuPont de Nemours (DD - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is DuPont de Nemours due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

DuPont's Earnings and Revenues Trounce Estimates in Q1

DuPont recorded earnings (on a reported basis) from continuing operations of 89 cents per share for first-quarter 2021 against a loss of 75 cents per share in the year-ago quarter.

Barring one-time items, earnings came in at 91 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 77 cents.

DuPont raked in net sales of $3,976 million, up 8% from the year-ago quarter. It also beat the Zacks Consensus Estimate of $3,811.5 million. The company saw higher organic sales across its segments in the quarter. It benefited from sustained strength in semiconductors and smartphone technologies, continued recovery in automotive and industrial markets and strong demand for water filtration technologies.

However, the company faced challenges from higher raw material and logistics costs in the quarter.

Segment Highlights

The company’s Electronics & Industrial segment recorded net sales of $1.3 billion in the reported quarter, up 17% on a year-over-year comparison basis. Organic sales rose 14% on 15% higher volumes. Volume growth was driven by Interconnect Solutions and Semiconductor Technologies.

Net sales in the Water & Protection unit were $1.3 billion, up 4% year over year. Organic sales rose 1% on 1% higher volume. The company saw double-digit volume growth in Water Solutions.

Net sales for the Mobility & Materials division were $1.2 billion in the reported quarter, up 11% year over year. Organic sales rose 8% on 1% higher pricing and 7% volume increase. The company saw sustained recovery in the automotive market and strong demand for specialty pastes used in consumer electronics.

Financials

DuPont had cash and cash equivalents of $4,384 million at the end of the quarter, up around 151% year over year. Long-term debt was $10,625 million, down roughly 22% year over year.

The company also generated operating cash flow of $378 million and free cash flow of $95 million in the quarter.

Outlook

DuPont raised its guidance for net sales and adjusted earnings per share for 2021. Net sales for the year are now forecast to be between $15.7 billion and $15.9 billion, compared with $15.4 billion and $15.6 billion expected earlier.

The company also expects adjusted earnings per share for 2021 in the band of $3.60-$3.75, up from the prior view of $3.30-$3.45.

For the second quarter of 2021, DuPont sees net sales in the band of $3.925-$4.025 billion. Adjusted earnings is predicted in the range of 93-95 cents per share for the quarter.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.11% due to these changes.

VGM Scores

At this time, DuPont de Nemours has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise DuPont de Nemours has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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