Why Is Chemicals Company DuPont Stock Shooting Higher Today?

DuPont De Nemours, Inc. DD reported a fourth-quarter fiscal 2023 sales decline of 7% year-over-year to $2.898 billion, missing the consensus of $2.929 billion.

An organic sales decline of 10% reflects lower volume driven by the impact of channel inventory destocking within Safety Solutions.

Electronics & Industrial sales $1.36 billion (+1% Y/Y) and Water & Protection sales $1.28 billion (-15% Y/Y). 

Operating EBITDA fell 6% Y/Y to $715 million, and the margin expanded 30 bps to 24.7%. Adjusted EPS was $0.87 (-2% Y/Y), above the consensus of $0.85.

Operating cash flow for the quarter was $646 million, compared to $185 million a year ago. Adjusted free cash flow was $501 million (+166% Y/Y).

DuPont held cash and equivalents of $2.8 billion as of December 31, 2023.

Buyback: The company announced the approval of a new $1 billion share repurchase program authorization with an intended $500 million accelerated share repurchase transaction to be launched imminently.

Dividend: DuPont declared a first-quarter dividend of $0.38 per share, representing a 6% increase to its quarterly dividend, payable March 15, 2024, to holders of record at the close of business on February 29, 2024.

“Our current expectation for full year 2024 forecasts a return to year-over-year sales and earnings growth in the second half driven by anticipated electronics market recovery, including improvement in semiconductor fab utilization rates, as well as improved orders within industrial markets as customer inventory levels normalize,” said Lori Koch, Chief Financial Officer of DuPont.

1Q24 Outlook: DuPont continues to expect adjusted EPS of $0.63-$0.65 versus $0.67 consensus and revenue of ~$2.80 billion versus $2.85 billion consensus. The company sees operating EBITDA of $610 million.

2024 Outlook: DuPont sees adjusted EPS of $3.25-$3.65 versus $3.59 consensus and revenue of $11.9 billion-$12.3 billion versus $12.30 billion consensus. The company expects operating EBITDA of $2.8 billion-$3 billion.

Price Action: DD shares were trading higher by 5.49% to $64.57 on the last check Tuesday.