DuPont reports higher earnings but issues cautious forecast for remainder of 2022

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DuPont reported an increase in earnings for the second quarter while acknowledging that inflation and other factors will lead to a more cautious outlook during the rest of the year.

DuPont, after numerous spin-offs and sales, is only a shadow of its former size in terms of revenues, although it will grow a bit larger with the pending purchase of electronics supplier Rogers Corp.

“We delivered second quarter financial results ahead of expectations by maintaining a disciplined focus on pricing actions and operational excellence in the face of continued global supply chain and logistics challenges and ongoing inflationary pressure,” said Ed Breen, DuPont CEO. “Underlying demand during the quarter in our key end-markets remained strong. Year-over-year and sequential sales and earnings growth in a volatile macro environment demonstrated the strength of our portfolio, our deep customer relationships, and the leading market positions we hold globally.”

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“We continue to advance our previously announced portfolio actions of acquiring Rogers Corporation and divesting a substantial portion of the former Mobility & Materials segment,” Breen continued. “Regarding Rogers, we expect to close the acquisition during the third quarter of 2022, with China being the last remaining jurisdiction requiring regulatory approval. For the M&M transactions, we continue to expect the completion of the sale of portions of this business to Celanese to close around year-end.”

“As DuPont drives innovation investment to support long-term growth, we continue to introduce new products across our key growth pillars,” Breen said. “We are excited to have won four 2022 Edison Awards highlighting innovative technologies while also progressing well with our broader new product pipeline to support growth over the coming years.”

Second Quarter 2022 Results

Dollars in millions, unless noted2Q’222Q’21Change vs. 2Q’21
Net sales$3,322$3,1047%
GAAP Income from continuing operations$365$395(8)%
Operating EBITDA(2)$829$7806%
Operating EBITDA(2) margin %25.0%25.1%(10) bps
GAAP EPS from continuing operations$0.71$0.73(3)%
Adjusted EPS(2)$0.88$0.7911%

Outlook

Dollars in millions, unless noted3Q’22EFull Year 2022E
Net sales$3,170 – $3,370$13,000 – $13,400
Operating EBITDA(2)Approx. $810$3,250 – $3,350
Adjusted EPS(2)Approx. $0.81$3.27 – $3.43

“Our strong first half 2022 results reflect positively on the secular end-markets in which we operate and highlight our team’s focus on execution,” said Lori Koch, the chief financial officer of DuPont. “As we look towards the second half, demand and overall order trends in our key end-markets remain solid. However, future uncertainties continue to exist, including continued inflationary pressure, challenging supply chains, and U.S. dollar strength against global currencies.

“We are narrowing our full year 2022 adjusted EPS guidance from $3.20-$3.50 to $3.27-$3.43 while maintaining the mid-point of our previous range.” Koch continued. “Our updated full year 2022 guidance ranges for net sales and operating EBITDA reflect incremental foreign currency headwinds and the removal of contribution from the Biomaterials business, which was divested on May 31, 2022.

“We expect third quarter 2022 net sales and operating EBITDA to be slightly weaker than second quarter 2022 as sequential volume increases are expected to be offset by foreign currency headwinds and the absence of the Biomaterials net sales contribution,” Koch said. “We are also expecting a negative impact during the third quarter on operating EBITDA of approximately $15 million from unplanned downtime at our Spruance site in Virginia within the W&P segment resulting from an unforeseen utility disruption with a third-party supplier. On a year-over-year basis, we expect third-quarter net sales to be up two percent at the mid-point of the range, or up high single-digits on an organic basis.”

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