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DuPont's (DD) Q3 Earnings Surpass Estimates, Revenues Lag
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DuPont de Nemours, Inc. (DD - Free Report) reported earnings from continuing operations of 62 cents per share for third-quarter 2023, down from 69 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at 92 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 84 cents.
DuPont raked in net sales of $3,058 million, down 8% from the year-ago quarter. It lagged the Zacks Consensus Estimate of $3,147.6 million. The company saw a 10% decline in organic sales in the quarter,modestly offset by a favorable portfolio impact of 2%.
DuPont de Nemours, Inc. Price, Consensus and EPS Surprise
The company’s Electronics & Industrial segment recorded net sales of $1,368 million in the reported quarter, down 9% on a year-over-year comparison basis. It was above our estimate of $1,341 million. Organic sales fell 13% due to a 12% decline in volumes and a 1% fall in prices.
The Semiconductor Technologies business reported a high-teen decline in organic sales due to inventory destocking and reduced semiconductor fab utilization caused by weak consumer electronics demand. However, on a reported basis, sales remained flat sequentially. Interconnect Solutions also witnessed an 11% year-over-year decrease in organic sales, driven by reduced consumer electronics volumes, inventory destocking, and lower metals price pass-through, but reported an 8% sequential increase. In the Industrial Solutions business, organic sales were down by a high-single-digit percentage, primarily due to biopharma market inventory destocking and lower demand in electronics-related sectors, partially offset by increased demand for OLED materials.
Net sales in the Water & Protection unit were $1,413 million, down 8% on a year-over-year comparison basis. The figure was below our estimate of $1,458.1 million. Sales fell due to a 9% decline in volume, slightly offset by a 1% increase in price.
Safety Solutions reported a high-single-digit decline in organic sales, primarily due to volume declines resulting from channel inventory destocking. Shelter Solutions also experienced a high-single-digit organic sales decrease, driven by ongoing softness in the construction market, including inventory destocking. Water Solutions saw a mid-single-digit decline in organic sales, mainly due to lower volumes resulting from weaker industrial demand and distributor inventory destocking in China.
Financials
DuPont had cash and cash equivalents of $1,338 million at the end of the quarter, down around 25% year over year. Long-term debt was $7,740 million, down about 26.7% year over year.
The company also generated operating cash flow from continuing operations of $740 million during the quarter.
Guidance
The company now sees net sales for 2023 to be around $12,170 million. Adjusted earnings per share for 2023 are forecast to be around $3.45. Also, Operating EBITDA for 2023 is expected to be around $2,975 million.
For the fourth quarter, demand for consumer electronics is anticipated to remain in line with the third quarter, as indicated by consistent order rates from customers. This will likely result in a sequential sales improvement in the Semiconductor Technologies segment. However, compared with the previous guidance, there are additional challenges stemming from channel inventory destocking and decreased industrial water demand in China, DD noted.
Price Performance
DuPont’s shares have risen 20.4% in a year compared with the 4.5% fall recorded by the industry.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 37.2% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.57, indicating year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 77.2% in the past year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.08, indicating year-over-year growth of 14.6%. LIN beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have rallied 29.8% in the past year.
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DuPont's (DD) Q3 Earnings Surpass Estimates, Revenues Lag
DuPont de Nemours, Inc. (DD - Free Report) reported earnings from continuing operations of 62 cents per share for third-quarter 2023, down from 69 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at 92 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 84 cents.
DuPont raked in net sales of $3,058 million, down 8% from the year-ago quarter. It lagged the Zacks Consensus Estimate of $3,147.6 million. The company saw a 10% decline in organic sales in the quarter,modestly offset by a favorable portfolio impact of 2%.
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 $1,368 million in the reported quarter, down 9% on a year-over-year comparison basis. It was above our estimate of $1,341 million. Organic sales fell 13% due to a 12% decline in volumes and a 1% fall in prices.
The Semiconductor Technologies business reported a high-teen decline in organic sales due to inventory destocking and reduced semiconductor fab utilization caused by weak consumer electronics demand. However, on a reported basis, sales remained flat sequentially. Interconnect Solutions also witnessed an 11% year-over-year decrease in organic sales, driven by reduced consumer electronics volumes, inventory destocking, and lower metals price pass-through, but reported an 8% sequential increase. In the Industrial Solutions business, organic sales were down by a high-single-digit percentage, primarily due to biopharma market inventory destocking and lower demand in electronics-related sectors, partially offset by increased demand for OLED materials.
Net sales in the Water & Protection unit were $1,413 million, down 8% on a year-over-year comparison basis. The figure was below our estimate of $1,458.1 million. Sales fell due to a 9% decline in volume, slightly offset by a 1% increase in price.
Safety Solutions reported a high-single-digit decline in organic sales, primarily due to volume declines resulting from channel inventory destocking. Shelter Solutions also experienced a high-single-digit organic sales decrease, driven by ongoing softness in the construction market, including inventory destocking. Water Solutions saw a mid-single-digit decline in organic sales, mainly due to lower volumes resulting from weaker industrial demand and distributor inventory destocking in China.
Financials
DuPont had cash and cash equivalents of $1,338 million at the end of the quarter, down around 25% year over year. Long-term debt was $7,740 million, down about 26.7% year over year.
The company also generated operating cash flow from continuing operations of $740 million during the quarter.
Guidance
The company now sees net sales for 2023 to be around $12,170 million. Adjusted earnings per share for 2023 are forecast to be around $3.45. Also, Operating EBITDA for 2023 is expected to be around $2,975 million.
For the fourth quarter, demand for consumer electronics is anticipated to remain in line with the third quarter, as indicated by consistent order rates from customers. This will likely result in a sequential sales improvement in the Semiconductor Technologies segment. However, compared with the previous guidance, there are additional challenges stemming from channel inventory destocking and decreased industrial water demand in China, DD noted.
Price Performance
DuPont’s shares have risen 20.4% in a year compared with the 4.5% fall recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
DuPont currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are The Andersons Inc. (ANDE - Free Report) and Carpenter Technology Corporation (CRS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Linde plc (LIN - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 37.2% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.57, indicating year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 77.2% in the past year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.08, indicating year-over-year growth of 14.6%. LIN beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have rallied 29.8% in the past year.