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DuPont's (DD) Earnings and Revenues Trounce Estimates in Q4

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DuPont de Nemours, Inc. (DD - Free Report) recorded earnings (on a reported basis) from continuing operations of 47 cents per share for fourth-quarter 2021, down from 60 cents per share in the year-ago quarter.

Barring one-time items, earnings came in at $1.08 per share for the reported quarter, topping the Zacks Consensus Estimate of $1.01.
 
DuPont raked in net sales of $4,271 million, up 14% from the year-ago quarter. It also beat the Zacks Consensus Estimate of $3,945.8 million. The company saw a 13% rise organic sales in the quarter, supported by 6% higher volumes and 7% pricing gains. It also witnessed double-digit organic growth across all four regions in the reported quarter.

Volume growth was driven by sustained strong global demand in major areas such as semiconductors and water, coupled with continued improvement in industrial end-markets. The price increase mainly reflects actions taken by the company to offset raw material cost inflation.

 

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 $1.5 billion in the reported quarter, up 19% on a year-over-year comparison basis. Organic sales rose 9% on higher volumes. Volume growth was driven by gains in Semiconductor Technologies. Industrial Solutions also registered volume growth while organic sales declined in Interconnect Solutions.

Net sales in the Water & Protection unit were $1.4 billion, up 16% year over year. Organic sales rose 17% on 12% higher volume and 5% higher prices. Sales were driven by the growth in 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 12% year over year. Organic sales rose 13% on 16% higher pricing that more than offset a 3% volume decline. Volume fell due to the weakness in global automotive production resulting from supply-chain constraints, mainly the semiconductor shortage.

FY21 Results

Earnings from continuing operations for full-year 2021 were $3.23 per share compared with a loss of $3.31 per share a year ago. Net sales went up 16% year over year to $16,653 million.

Financials

DuPont had cash and cash equivalents of $2,011 million at the end of 2021, down around 21% year over year. Long-term debt was $10,632 million, down roughly 32% year over year.

The company also generated operating cash flow of $2.3 billion and free cash flow of $1.4 billion in 2021. It returned more than $2.7 billion to shareholders through share repurchases and dividends during the year. DuPont also reduced long-term debt by $5 billion during the year.

DuPont’s board announced a first-quarter dividend of 33 cents per share, representing a 10% increase to regular quarterly dividend. Its board also authorized a new $1 billion share repurchase program, which expires on Mar 31, 2023. The new authorization allows it to buyback shares after the expected completion of the remaining $375 million in repurchases under its current share buyback program in first-quarter 2022.

Outlook

The company sees net sales for 2022 to be between $17.4 billion and $17.8 billion. It also expects adjusted earnings per share (EPS) for 2022 in the band of $4.60-$4.90, reflecting a 10% year-over-year increase at the mid-point of the range.

DuPont expects net sales of between $4.2 billion and $4.3 billion for the first quarter of 2022. Adjusted EPS is forecast in the range of 94 cents to $1.00 for the quarter.

While DuPont expects consumer demand to remain strong, it sees raw material and logistics cost inflation to continue to impact margins. It anticipates operating EBITDA margin to be about flat sequentially in the first quarter with continued improvement through the balance of the year to more normalized levels in the back half.

Price Performance

DuPont’s shares are down 0.5% over a year compared with a 7.1% rise recorded by the industry.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Commercial Metals Company (CMC - Free Report) , Albemarle Corporation (ALB - Free Report) and AdvanSix Inc. (ASIX - Free Report) .

Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 36.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 72% in a year.

Albemarle, carrying a Zacks Rank #1, has an expected earnings growth rate of 51.5% for the current year. ALB's consensus estimate for the current year has been revised 5.6% upward over the past 60 days.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have gained around 36% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 5.3% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 66% in a year.