DuPont's (DD) Earnings & Revenues Surpass Estimates in Q1

DuPont de Nemours, Inc. DD recorded a loss (on a reported basis) of 83 cents per share for first-quarter 2020 against earnings of 69 cents per share in the comparable quarter a year ago. The bottom line was hurt by a higher tax rate, lower segment results and higher merger-related amortization expense.

Barring one-time items, earnings came in at 84 cents per share for the reported quarter, beating the Zacks Consensus Estimate of 83 cents.

DuPont raked in net sales of $5,221 million, down 4% from the comparable quarter a year ago. It also surpassed the Zacks Consensus Estimate of $5,173.3 million.

Net sales fell 2% on an organic basis as growth in Electronics & Imaging and Nutrition & Biosciences units was more than offset by declines in the other segments.

DuPont de Nemours, Inc. Price, Consensus and EPS Surprise

 

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 & Imaging segment recorded net sales of $884 million in the reported quarter, up 7% on a year-over-year comparison basis. Organic sales rose 8% on 9% higher volumes. Gains volumes were driven by semiconductor technologies.

At the Nutrition & Biosciences unit, sales were up 1% to $1.5 billion. Organic sales rose 3% year over year on 2% higher pricing and 1% higher volumes. The company saw strength across probiotics and food & beverage businesses.

Net sales for the Transportation & Industrial division were $1.1 billion in the reported quarter, down 13% year over year. Organic sales fell 12% on 4% lower pricing and 8% volume decline due to weakness in the automotive market. The company also saw softer demand in oil and gas.

Net sales in the Safety & Construction unit were $1.3 billion, down 1%. Organic sales fell 2% as 2% price improvement was offset by 4% lower volume.  The company saw strong demand for Tyvek protective garments. It increased the production of Tyvek garments during the quarter to help combat the coronavirus pandemic.  

In the non-core reporting segment, net sales fell 19% to $366 million. Organic sales declined 10%, impacted by 12% lower volumes. Prices rose 2% in the quarter.

Financials
 
DuPont had cash and cash equivalents of $1,748 million at the end of the quarter. Long-term debt was $13,618 million. The company strengthened its liquidity with $1 billion revolving credit facility.

Outlook

DuPont said that it is witnessing strength across personal protection, water filtration, food and beverage, electronics and probiotics markets. However, it is seeing weakness in automotive, oil and gas, and certain industrial end markets. The company is taking actions to improve its cost structure, strengthen its liquidity and optimize working capital amid the coronavirus-induced crisis.

DuPont now sees $180 million of savings in 2020 from its earlier announced incremental cost actions. It has also implemented actions to mitigate the impact of the coronavirus pandemic. These include actions to deliver more than $500 million of working capital improvement and reduction of capital expenditures by roughly $500 million versus the prior year.

Price Performance

DuPont’s shares are down around 30.4% year to date compared with the roughly 27.7% decline recorded by the industry.

 

Zacks Rank & Key Picks

DuPont currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space are The Scotts Miracle-Gro Company SMG, Franco-Nevada Corporation FNV and Newmont Corporation NEM.

Scotts Miracle-Gro has an expected earnings growth rate of 15.9% for the current fiscal year. The company’s shares have gained roughly 36% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 22% for the current year. It currently carries a Zacks Rank #2 (Buy). The company’s shares have surged roughly 101% in a year.

Newmont has a projected earnings growth rate of 95.5% for the current year. The company’s shares have rallied around 110% in a year. It currently has a Zacks Rank #2.

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