DuPont de Nemours Tops Analysts on Earnings
Shares of DuPont de Nemours Inc. (NYSE:DD) closed 0.65% lower at $71.69 Thursday after the company issued second-quarter results.
Earnings increased 9% from the prior-year quarter to 97 cents, topping consensus' estimates by 13 cents.
The U.S. chemicals company recorded revenue of $5.47 billion, down 6.7% and falling $160 million short of expectations. The decline was a consequence of weak market conditions.
Lower volumes in addition to currency and portfolio headwinds more than offset higher pricing, causing a 3% drop in organic net sales.
During the quarter, DuPont de Nemours produced operating Ebitda of $1.4 billion for an operating Ebitda margin of 26%, which increased 170 basis points thanks to higher price and cost synergies.
The company booked total cash, cash equivalents and short-term securities of nearly $1.7 billion on the balance sheet as of June 30. Total debt amounted to $17.23 billion.
Since the spinoff of Dow Inc (DOW) on April 1 and Corteva Inc. (CTVA) on June 1, the board of DuPont de Nemours authorized a $2 billion share repurchases program. The company has bought back $250 million of its common shares as of Aug. 1.
"Our results show our readiness to respond to continuously evolving market conditions," Executive Chairman Ed Breen said. "We drove productivity actions, significantly improved our margins and began executing immediately on a share repurchase program. This performance-based mindset and commitment to shareholder value starting at the Board level and through each of our businesses is critical as we move forward."
Looking ahead to full 2019, the company expects lower organic sales compared to the previous year. Nonetheless, the effective cost-reduction strategies it has implemented allowed the company to raise its pro forma adjusted profit forecast to a range of $3.75 to $3.85 per share versus consensus estimates of $3.77.
The share price declined 6% so far this year, underperforming the S&P 500 index by 25%. The 52-week range was $63.62 to $102.34 at close Thursday.
On Sept. 13, DuPont de Nemours Inc. will pay a 30-cent cash quarterly dividend per common share to shareholders of record July 31. The ex-dividend date is July 30. Based on Thursday's closing price, the dividend generates forward dividend yield of 4.16% versus the industry median of 2.2% and compared to the S&P 500 index's yield of 1.9%.
Disclosure: I have no positions in any securities mentioned.
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