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DuPont de Nemours, Inc. (DD - Free Report) recorded earnings (on a reported basis) from continuing operations of 80 cents per share for third-quarter 2021, up from 11 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at $1.15 per share for the reported quarter, topping the Zacks Consensus Estimate of $1.12.
DuPont raked in net sales of $4,271 million, up 18% from the year-ago quarter. It also beat the Zacks Consensus Estimate of $4,093.3 million. The company saw a 16% rise organic sales in the quarter, supported by 10% higher volumes and 6% pricing gains. It also witnessed double-digit sales growth across its segments in the reported quarter.
The company benefited from strong demand across electronics, automotive, construction and water end-markets and sustained improvement in global industrial end-markets in the quarter. However, it faced challenges from raw material cost inflation as well as global supply chain and logistics issues in the quarter.
DuPont de Nemours, Inc. Price, Consensus and EPS Surprise
The company’s Electronics & Industrial segment recorded net sales of $1.5 billion in the reported quarter, up 21% on a year-over-year comparison basis. Organic sales rose 9% on higher volumes. Volume growth was driven by gains in Industrial Solutions with strength in consumer electronics, healthcare and industrial markets. Continued strength was also witnessed in Semiconductor Technologies. Organic sales declined in Interconnect Solutions.
Net sales in the Water & Protection unit were $1.4 billion, up 12% year over year. Organic sales rose 11% on 9% higher volume and 2% higher prices. Sales were driven by Safety Solutions on continued recovery in industrial end-markets. The company also saw strong demand in Water Solutions technologies.
Net sales for the Mobility & Materials division were $1.3 billion in the reported quarter, up 30% year over year. Organic sales jumped 28% on 16% higher pricing and 12% volume increase. The company saw sustained recovery from the impacts of the pandemic. Sales gains were broad-based in the reported quarter, reflecting significant organic growth across Engineering Polymers, Performance Resins and Advanced Solutions.
Financials
DuPont had cash and cash equivalents of $1,670 million at the end of the quarter, down around 58% year over year. Long-term debt was $10,629 million, down roughly 51% year over year.
The company also generated operating cash flow of $842 million and free cash flow of $634 million in the quarter. Moreover, it returned around $657 million to shareholders through share repurchases and dividends during the quarter.
Outlook
DuPont noted that it will continue to implement strategic price increases in the fourth quarter in the wake of rising raw material costs. The company expects strong demand trends to continue across almost all end-markets in the fourth quarter. However, it is witnessing a deceleration in order patterns due to the global semiconductor shortages, mainly in the automotive market.
The company now sees net sales for the year to be between $16.34 billion and $16.40 billion, down from $16.45 billion and $16.55 billion it expected earlier. It also expects adjusted earnings per share for 2021 in the band of $4.18-$4.22, down from the prior view of $4.24-$4.30.
Acquisition of Rogers for $5.2 billion
DuPont also agreed to acquire Arizona-based Rogers Corporation (ROG - Free Report) , a global leader in engineered materials and components, for $5.2 billion. Rogers’ products include high-frequency circuit materials, ceramic substrates for power semiconductor devices and high-performance foams. The transaction, which is subject to customary closing conditions, is expected to complete in the second quarter of 2022.
The buyout, which builds on DuPont’s recent acquisition of Laird Performance Materials, is expected to strengthen DuPont's leadership position in advanced materials for high-growth secular end-markets that includes electric vehicles, advanced driver assistance systems, 5G telecommunications and clean energy. It will further bolster DuPont’s position as the leading electronic solutions provider in the industry. The company expects to realize around $115 million in run-rate cost synergies (pre-tax) by the end of 2023.
DuPont also announced its plans to divest a substantial portion of its Mobility & Materials segment as part of its ongoing transformation. The company expects these two transactions to significantly improve its top-line growth, operating EBITDA margins and cross-cycle earnings stability.
Price Performance
DuPont’s shares are up 19.5% over a year compared with a 22.6% rise recorded by the industry.
Image: Bigstock
DuPont (DD) Tops Q3 Earnings & Sales Estimates, Cuts FY21 View
DuPont de Nemours, Inc. (DD - Free Report) recorded earnings (on a reported basis) from continuing operations of 80 cents per share for third-quarter 2021, up from 11 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at $1.15 per share for the reported quarter, topping the Zacks Consensus Estimate of $1.12.
DuPont raked in net sales of $4,271 million, up 18% from the year-ago quarter. It also beat the Zacks Consensus Estimate of $4,093.3 million. The company saw a 16% rise organic sales in the quarter, supported by 10% higher volumes and 6% pricing gains. It also witnessed double-digit sales growth across its segments in the reported quarter.
The company benefited from strong demand across electronics, automotive, construction and water end-markets and sustained improvement in global industrial end-markets in the quarter. However, it faced challenges from raw material cost inflation as well as global supply chain and logistics issues in the quarter.
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 $1.5 billion in the reported quarter, up 21% on a year-over-year comparison basis. Organic sales rose 9% on higher volumes. Volume growth was driven by gains in Industrial Solutions with strength in consumer electronics, healthcare and industrial markets. Continued strength was also witnessed in Semiconductor Technologies. Organic sales declined in Interconnect Solutions.
Net sales in the Water & Protection unit were $1.4 billion, up 12% year over year. Organic sales rose 11% on 9% higher volume and 2% higher prices. Sales were driven by Safety Solutions on continued recovery in industrial end-markets. The company also saw strong demand in Water Solutions technologies.
Net sales for the Mobility & Materials division were $1.3 billion in the reported quarter, up 30% year over year. Organic sales jumped 28% on 16% higher pricing and 12% volume increase. The company saw sustained recovery from the impacts of the pandemic. Sales gains were broad-based in the reported quarter, reflecting significant organic growth across Engineering Polymers, Performance Resins and Advanced Solutions.
Financials
DuPont had cash and cash equivalents of $1,670 million at the end of the quarter, down around 58% year over year. Long-term debt was $10,629 million, down roughly 51% year over year.
The company also generated operating cash flow of $842 million and free cash flow of $634 million in the quarter. Moreover, it returned around $657 million to shareholders through share repurchases and dividends during the quarter.
Outlook
DuPont noted that it will continue to implement strategic price increases in the fourth quarter in the wake of rising raw material costs. The company expects strong demand trends to continue across almost all end-markets in the fourth quarter. However, it is witnessing a deceleration in order patterns due to the global semiconductor shortages, mainly in the automotive market.
The company now sees net sales for the year to be between $16.34 billion and $16.40 billion, down from $16.45 billion and $16.55 billion it expected earlier. It also expects adjusted earnings per share for 2021 in the band of $4.18-$4.22, down from the prior view of $4.24-$4.30.
Acquisition of Rogers for $5.2 billion
DuPont also agreed to acquire Arizona-based Rogers Corporation (ROG - Free Report) , a global leader in engineered materials and components, for $5.2 billion. Rogers’ products include high-frequency circuit materials, ceramic substrates for power semiconductor devices and high-performance foams. The transaction, which is subject to customary closing conditions, is expected to complete in the second quarter of 2022.
The buyout, which builds on DuPont’s recent acquisition of Laird Performance Materials, is expected to strengthen DuPont's leadership position in advanced materials for high-growth secular end-markets that includes electric vehicles, advanced driver assistance systems, 5G telecommunications and clean energy. It will further bolster DuPont’s position as the leading electronic solutions provider in the industry. The company expects to realize around $115 million in run-rate cost synergies (pre-tax) by the end of 2023.
DuPont also announced its plans to divest a substantial portion of its Mobility & Materials segment as part of its ongoing transformation. The company expects these two transactions to significantly improve its top-line growth, operating EBITDA margins and cross-cycle earnings stability.
Price Performance
DuPont’s shares are up 19.5% over a year compared with a 22.6% rise recorded by the industry.
Zacks Rank & Key Picks
DuPont currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) and Methanex Corporation (MEOH - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 181.7% for the current year. The stock has also rallied around 86% over a year.
Methanex has a projected earnings growth rate of 429% for the current year. The company’s shares have shot up around 54% in a year.