DuPont Beats Q2 Earnings Estimates, Revises FY23 Outlook

DuPont De Nemours, Inc. DD reported a Q2 FY23 sales decrease of 7% Y/Y to $3.09 billion, beating the consensus of $3.00 billion.

Organic net sales declined 4% Y/Y, with currency headwinds of 1% and an unfavorable portfolio impact of 2%.

Volume declined 6% Y/Y, while the price increased 2% Y/Y in the quarter.

Electronics & Industrial sales $1.31 billion (-14% Y/Y) and Water & Protection sales $1.49 billion (flat Y/Y).

Adjusted EPS was $0.85 (-3% Y/Y), above the consensus of $0.83.

Operating EBITDA fell 11% Y/Y to $738 million, and the margin contracted 110 bps to 23.9%.

Operating cash flow for the quarter was $400 million, compared to $167 million a year ago. Adjusted free cash flow was $277 million (+502% Y/Y).

DD held cash and cash equivalents of $4.99 billion as of June 30, 2023.

"Additionally, we are nearing completion of the $3.25 billion accelerated share repurchase transaction launched last November and we intend to complete our remaining share repurchase authorization through a new $2 billion ASR executed shortly thereafter," said Ed Breen, Executive Chairman and Chief Executive Officer.

Yesterday, the company completed the previously announced acquisition of Spectrum Plastics Group. 

Q3 2023 Outlook: DuPont sees net sales of ~$3.150 billion versus consensus of $3.19 billion, Operating EBITDA of ~$755 million, and Adjusted EPS of ~0.84 versus $0.93 consensus.

FY23 Outlook: DD revised net sales guidance to $12.45 billion - $12.55 billion (up from prior $12.3 billion - $12.5 billion) versus $12.41 billion consensus and Adjusted EPS of $3.40 - $3.50 (down from the prior $3.55 - $3.70) versus $3.60 consensus.

"As we look at the current demand environment, we continue to expect fairly steady demand in most of our industrial-based end-markets within the E&I and W&P segments, although we expect sales moderation in our Water Solutions business due to slower demand in China. Within electronics markets, we saw sequential sales improvement in our Interconnect Solutions business during the second quarter with mid-single digit sequential sales lift expected in the third quarter. In Semiconductor Technologies, we assume sales in the second half of 2023 will improve slightly after setting an expected bottom in the second quarter," said Lori Koch, Chief Financial Officer.

Price Action: DD shares are trading lower by 0.34% at $76.78 premarket on the last check Wednesday.