DuPont beats expectations on fourth-quarter adjusted earnings

(Sharecast News) - Shares in American chemicals giant DuPont were bouncing in premarket trading on Tuesday, after the parent company of brands including Kevlar, Tyvek and Styrofoam beat market expectations on profits and raised its dividend. The company reported net sales of $2.9bn for the fourth quarter of 2023, down 7% year-on-year.

Organic sales were down 10%, while operating EBITDA came in at $715m and the firm reported a GAAP loss from continuing operations of $300m, primarily due to an $800m non-cash goodwill impairment charge.

Adjusted earnings per share for the quarter stood at 87 cents, above the FactSet consensus forecast for 85 cents.

GAAP losses per share from continuing operations came in at 72 cents, while the company generated $501m in adjusted free cash flow during the period.

For the full year, DuPont reported net sales of $12.1bn, reflecting a 7% decrease compared to the prior year, with organic sales declining 6%.

However, the company reported a GAAP income from continuing operations of $533m and an operating EBITDA of $2.9bn.

Adjusted earnings per share for the full year amounted to $3.48, with GAAP earnings per share from continuing operations at $1.09.

DuPont generated $1.6bn in adjusted free cash flow for the entire year.

In terms of capital allocation, DuPont completed a $2bn accelerated share repurchase transaction launched in September.

The company also announced board approval for a new $1bn share buyback, including an intended $500m accelerated share repurchase set to launch soon.

DuPont raised its quarterly dividend by 5.6% to 38 cents per share, payable on 15 March to shareholders of record on 29 February.

The positive results followed a recent selloff in DuPont stock - its largest in more than 15 years, after it issued a profit warning for the first quarter.

The warning was attributed to inventory destocking by customers and continued weak demand in China.

Looking ahead to 2024, DuPont said it expected adjusted earnings per share in the range of $3.25 to $3.65 and anticipated sales between $11.9bn and $12.3bn.

"In the face of inventory destocking that impacted many of our end-markets in 2023 and continued economic softness in China, our teams remained focused on sound operational execution and driving productivity and cost discipline," said executive chairman and chief executive officer Ed Breen.

"We delivered significant year-over-year cash flow improvement in 2023, including a strong fourth quarter finish, which underscores our ongoing prioritisation of working capital management.

"We continue to see demand stabilisation within semiconductor technologies and interconnect solutions and we remain confident of a broad-based electronics materials recovery in 2024."

Breen said the company did, however, see incremental channel inventory destocking within its industrial-based businesses at the end of 2023, and was seeing similar trends continue in the early parts of 2024, with recovery timing expected to vary by end-market as the year progressed.

"We remain confident in the through-cycle strength of our portfolio as our businesses are well-equipped to leverage market-leading positions and accelerate growth as inventories normalise and key end-markets recover."

At 0721 EST (1221 GMT), shares in DuPont de Nemours were up 2.11% in premarket trading in New York, at $62.50.

Reporting by Josh White for Sharecast.com.