DuPont's (DD) Q4 Earnings Surpass Estimates, Revenues Lag
DuPont de Nemours, Inc. DD incurred a loss (on a reported basis) from continuing operations $300 million or 72 cents per share in fourth-quarter 2023. In the year-ago quarter, the company had reported a profit of $105 million or 20 cents per share. The bottom line in the reported quarter was hurt by a hefty non-cash goodwill impairment charge of around $800 million.
Barring one-time items, earnings came in at 87 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 85 cents.
DuPont raked in net sales of $2,898 million, down 7% from the year-ago quarter. It missed the Zacks Consensus Estimate of $2,902 million. DD saw a 10% decline in organic sales in the quarter, hurt by a 9% lower volume and a 1% decline in pricing.
The company witnessed challenges from continued economic weakness in China and channel inventory de-stocking in the reported quarter.
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 $1,361 million in the reported quarter, up 1% on a year-over-year comparison basis. It was above our estimate of $1,339.6 million. Organic sales fell 7% on reduced volumes and prices.
Semiconductor Technologies organic sales fell on sustained customer inventory de-stocking and lower semiconductor fab utilization rates. Industrial Solutions registered lower sales mainly due to de-stocking within biopharma markets and for semiconductor-related capex equipment. Organic sales declined in Interconnect Solutions as higher volumes were more than offset by lower pass-through metals prices.
Net sales in the Water & Protection unit were $1,277 million, down 15% year over year, hurt by lower volumes. The figure was below our estimate of $1,381 million. DD saw lower sales in Safety Solutions, Water Solutions and Shelter Solutions on an organic basis in the quarter.
FY23 Results
Earnings from continuing operations for 2023 were $1.09 per share, compared with $2.02 a year ago. Net sales were $12.1 billion for the full year, down around 7% year over year.
Financials
DuPont had cash and cash equivalents of $2,392 million at the end of 2023, down around 35% year over year. Long-term debt was $7,800 million, up about 0.3% year over year.
The company generated operating cash flow from continuing operations of $646 million during the fourth quarter and $2.2 billion for full-year 2023.
DuPont completed the $2 billion accelerated share repurchase transaction launched in September 2023. It has announced the authorization of a new $1 billion share buyback program and a 6% increase to its quarterly dividend.
Outlook
The company sees net sales for 2024 to be $11,900-$12,300 million. Adjusted earnings per share for 2024 is forecast to be $3.25-$3.65.
For first-quarter 2024, the company expects net sales of roughly $2,800 million. Adjusted earnings per share for the quarter is projected in the range of 63-65 cents.
DuPont expects a sequential decline in sales and earnings in the first quarter driven by additional channel inventory de-stocking within its industrial-based businesses and continued weak demand in China.
Price Performance
DuPont’s shares have lost 21.3% in a year compared with the 19.8% decline recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
DuPont currently has a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation CCJ, Carpenter Technology Corporation CRS and Alpha Metallurgical Resources Inc. AMR.
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% over the past 60 days. The stock has shot up around 74% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.97, indicating a year-over-year surge of 248.3%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained 16% in the past year.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 139% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alpha Metallurgical Resources, Inc. (AMR) : Free Stock Analysis Report
DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Cameco Corporation (CCJ) : Free Stock Analysis Report
