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DuPont's (DD) Earnings and Revenues Trounce Estimates in Q2

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DuPont de Nemours, Inc. (DD - Free Report) logged earnings (on a reported basis) from continuing operations of 71 cents per share for second-quarter 2022, down from 73 cents per share in the year-ago quarter.

Barring one-time items, earnings came in at 88 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 74 cents.
 
DuPont raked in net sales of $3,322 million, up 7% from the year-ago quarter. It also surpassed the Zacks Consensus Estimate of $3,254.7 million. The company saw a 9% rise in organic sales in the quarter, supported by 1% higher volumes and 8% pricing gains. Pricing actions fully offset raw materials, logistics and energy cost inflation.

Volume gains were aided by strong demand in semiconductor, general industrial, water and construction end-markets, offset by reduced volumes from protective garments within the Safety Solutions business. The company saw strong underlying demand in its major end-markets during the quarter.

 

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 $1,527 million in the reported quarter, up 16% on a year-over-year comparison basis. Organic sales rose 8% on higher volumes and prices. Semiconductor Technologies organic sales rose on strong demand. Industrial Solutions also registered higher sales while organic sales declined in Interconnect Solutions on lower volumes.

Net sales in the Water & Protection unit were $1,497 million, up 6% year over year. Organic sales rose 9% on 12% pricing gains. Volumes fell 3% in the quarter.

Financials

DuPont had cash and cash equivalents of $1,439 million at the end of the quarter, down around 64% year over year. Long-term debt was $10,625 million, roughly flat year over year.

The company also generated operating cash flow of $86 million during the quarter. It returned $665 million to shareholders through share repurchases and dividends during the quarter.

Outlook

The company sees net sales for 2022 to be between $13 billion and $13.4 billion. It also narrowed its adjusted earnings per share (EPS) guidance for 2022 to the band of $3.27-$3.43 from its earlier view of $3.20-$3.50.

DuPont expects net sales of between $3.17 billion and $3.37 billion for the third quarter of 2022. Adjusted EPS is forecast to be around 81 cents for the quarter.

The company envisions net sales and operating EBITDA for the third quarter to be modestly weaker than the second quarter as higher sequential volumes are expected to be offset by foreign currency headwinds and the absence of the Biomaterials net sales contribution.

DuPont also sees an unfavorable impact in the third quarter on operating EBITDA of roughly $15 million from unplanned downtime at its Spruance site in Virginia. It expects third-quarter net sales to be up 2% at the mid-point of the guidance range on a year-over-year basis, or up high single-digits on an organic basis.

Price Performance

DuPont’s shares are down 19.1% over a year compared with an 8.6% decline recorded by the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

DuPont currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , ATI Inc. (ATI - Free Report) and Albemarle Corporation (ALB - Free Report) .

Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 37% over a year.

ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.

ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 27% in a year.

Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 16% in a year. The company flaunts a Zacks Rank #2.

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