DuPont's (DD) Earnings and Revenues Surpass Estimates in Q3
DuPont de Nemours, Inc. DD logged earnings (on a reported basis) from continuing operations of 69 cents per share for third-quarter 2022, up from 48 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at 82 cents per share for the reported quarter, beating the Zacks Consensus Estimate of 81 cents.
DuPont raked in net sales of $3,317 million, up 4% from the year-ago quarter. It also surpassed the Zacks Consensus Estimate by 1.53%. The company saw an 11% rise in organic sales in the quarter, supported by 3% higher volumes and 8% pricing gains. It benefited from strong underlying demand in its major end-markets during the quarter, especially semiconductor, water and general industrial.
Pricing actions and operational execution helped the company offset the cost inflation in the quarter. Volume rose on strong demand in semiconductor, water and industrial end-markets, partly masked by reduced volumes from protective garments within Safety Solutions and weakness in smartphones and personal computing within Interconnect Solutions.
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 $1,511 million in the reported quarter, up 3% on a year-over-year comparison basis. Organic sales rose 7% 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 $1,534 million, up 10% year over year. Organic sales rose 15% on 13% pricing gains and 2% higher volumes.
Financials
DuPont had cash and cash equivalents of $1,785 million at the end of the quarter, up around 7% year over year. Long-term debt was $10,564 million, down around 0.6% year over year.
The company also generated operating cash flow of $419 million during the quarter. It returned $415 million to shareholders through share repurchases and dividends during the quarter.
DuPont's board, on Nov 7, 2022, approved a new share buyback program authorizing the repurchase of up to $5 billion of common stock. The new authorization is in addition to the $250 million remaining under its current share repurchase program, which was approved in February 2022. It plans to enter accelerated share repurchase agreements imminently for the buyback of an aggregate of around $3.25 billion of common stock.
The company also intends to retire $2.5 billion of senior notes due in November 2023 during the fourth quarter of 2022.
Outlook
The company sees net sales for 2022 to be roughly $13 billion. Adjusted earnings per share for 2022 is now expected to be roughly $3.30.
DuPont also envisions demand to remain strong in most end-markets, notably water, industrial and auto adhesives in the fourth quarter. However, it sees continued weakness in consumer electronics globally and some slowdown in customer semiconductor fab production rates. It also intends to cut production rates to realign working capital in expectation of a more normal supply chain environment. The company also sees incremental currency headwinds to further impact both top and bottom lines.
DuPont also completed the Mobility & Materials (M&M) divestment to Celanese on Nov 1, 2022. Moreover, it terminated the earlier announced agreement to buy the outstanding shares of Rogers Corporation on Nov 1 due to lack of receipt of regulatory clearance.
Price Performance
DuPont’s shares are down 23.8% over a year compared with 12.2% decline recorded by the industry.
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Zacks Rank & Key Picks
DuPont currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Albemarle Corporation ALB and Commercial Metals Company CMC.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 49% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 430.9% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 4% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 33% in a year.
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