Why Chemical Company DuPont Shares Are Sinking Premarket Wednesday?

DuPont de Nemours Inc DD shares are trading lower after the company reported fourth-quarter preliminary results.

The company reported preliminary fourth-quarter net sales of ~$2.90 billion (vs. consensus of $3 billion) and adjusted EPS of $0.85 – $0.87 (vs. $0.85 estimate).

For FY23, DuPont reported preliminary net sales of ~$12.07 billion (vs. consensus of $12.17 billion) and adjusted EPS of $3.46 – $3.48 (vs. $3.46 estimate). The company’s prior guidance for 2023 was ~$12.17 billion in sales and ~$3.45 in Adjusted EPS.

Q1 Outlook: DuPont expects net sales of around $2.8 billion (vs. $3.04 billion estimate) and adjusted EPS of about $0.63 – $0.65 ($0.88 estimate).

DuPont will release fourth quarter and full year 2023 results on February 6, 2024.

Ed Breen, DuPont Executive Chairman and Chief Executive Officer, said, “As we finished 2023, we saw additional channel inventory destocking within our industrial businesses as well as continued weak demand in China. We are seeing similar trends continue and expect sequential sales and earnings to decline in the first quarter of 2024, driven by these factors and the absence of certain discrete items which benefited fourth quarter operating EBITDA.”

“We continue to see stabilization within Semiconductor Technologies with slight sequential sales lift occurring in the fourth quarter as expected and we remain confident of a broad-based market recovery for electronics materials in 2024.”

“Our current expectation for full year 2024 financial performance includes expected sequential improvement in sales and an approximate ten percent operating EBITDA increase in the second quarter from first quarter, as well as a return to year-over-year sales and earnings growth in the second half of the year.”

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Based on preliminary analysis, DuPont expects to record a non-cash goodwill impairment charge of $750 million to $850 million, which is included in the prior fourth quarter and full year 2023 GAAP ranges.

Also Read: Contaminant Litigation Risks May Affect DuPont Valuation, Analyst Downgrades Stock

Price Action: DD shares are down 11.26% at $66.28 premarket on the last check Wednesday.