DuPont shares tumble after release of preliminary earnings report

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Breen
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DuPont shares tumbled after the company announced preliminary financial results for the fourth quarter and full year ended December 31.

The final results will be announced in early February. The company will post a loss in the fourth quarter, due to weaker markets and an impairment charge for one of its businesses.

Shares of the company based near Wilmington dropped 14% on Wednesday and got less than 1% of that loss back on Wednesday.

Preliminary Fourth Quarter and Full Year 2023 Results

4Q’23 (Preliminary)FY’23 (Preliminary)
Net sales$2.90 billion$12.07 billion
GAAP Income (loss) from continuing operations$(370) to $(220) million$460 to $610 million
Operating EBITDA(2)$715 million$2.94 billion
GAAP EPS from continuing operations$(0.88) – $(0.52)$0.92 – $1.28
Adjusted EPS(2)$0.85 – $0.87$3.46 – $3.48
Cash provided by operating activities – cont. ops.$640 million$2.19 billion
Adjusted free cash flow(2)$500 million$1.57 billion

Initial First Quarter 2024 Outlook

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  • Net Sales are expected to be approximately $2.8 billion
  • Operating EBITDA (earnings before taxes and other expenses)  expected to be approximately $610 million

“In a continued lower volume environment, we remain focused on the operational levers within our control with strong cash generation during the fourth quarter,” stated Ed Breen, DuPont CEO. “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.”

Breen continued, “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. Further, we have acted quickly in executing the restructuring actions announced last November and will begin to realize associated cost savings later in the first quarter. 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 the first quarter, as well as a return to year-over-year sales and earnings growth in the second half of the year.”

DuPont’s financial closing procedures for the fourth quarter and year ended December 31, 2023, and are not yet complete. It is possible that the final results may differ from the preliminary results and that the first quarter outlook may change from the initial outlook discussed above between now and when results are finalized, a release stated.

DuPont also indicated it will write down the value of the Protection reporting unit within the Water & Protection segment. Based on a preliminary analysis, DuPont expects to record a non-cash goodwill impairment charge between $750 million to $850 million, which is included in the preliminary fourth quarter and full year 2023 GAAP ranges noted above.

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