DuPont Stock Drops as Global Economy Slows Down

by Warren Seah

DuPont’s stock experienced a decline in early trading following the release of their quarterly results, which highlighted the challenging environment for industrial and materials companies in the global economy. It seems that things are continuing to slowdown.

In the third quarter, DuPont (ticker: DD) reported earnings per share of 92 cents on sales of $3.1 billion. This surpassed Wall Street’s expectations of 84 cents per share on sales of $3.2 billion, according to FactSet. In comparison, during the same period last year, DuPont earned 82 cents per share on sales of $3.3 billion.

Despite ongoing volume challenges due to a decrease in channel inventory and a sluggish market in China, DuPont CEO Ed Breen expressed satisfaction with the solid third-quarter earnings, stating, “We delivered solid third-quarter earnings despite ongoing volume headwinds from channel inventory destocking and continued softness in China.”

While sales saw a decline of approximately 10% on a year-over-year basis due to weaknesses within the semiconductor and industrial businesses, there was an improvement in profit margins. This can be attributed to the impact of destocking as customers drew from their inventories and ordered fewer new products.

Moving forward, DuPont has projected full-year adjusted earnings per share of approximately $3.45 on sales of $12.2 billion. Although the sales guidance is slightly lower than the second-quarter update, the earnings-per-share guidance remains unchanged. Based on these estimates, it is anticipated that the fourth quarter will see earnings per share of about 84 cents on sales of $3 billion. As for Wall Street projections, they currently expect fourth-quarter earnings per share of 91 cents on sales of $3.2 billion.

Interestingly, while DuPont has surpassed its own earnings guidance in the first three quarters of this year, investors remain unsettled. In premarket trading, DuPont’s stock was down 1.9%, while both S&P 500 and Dow Jones Industrial Average futures were down around 0.4%.

Over the past 12 months, DuPont’s stock has shown a rise of approximately 24% coming into Wednesday trading.

To discuss the results, management will be hosting a conference call at 8 a.m. Eastern Time. Investors and analysts will be closely listening for insights into when business conditions may improve and when growth is expected to return.

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