DuPont's stock bounces after profit tops forecasts, dividend raised

By Tomi Kilgore

As chip technologies demand stabilizes, an electronics materials rebound looks certain

Shares of DuPont de Nemours Inc. bounced Tuesday, after the parent of Kevlar, Tyvek and Styrofoam brands reported fourth-quarter profit that topped expectations, lifted its dividend and announced a new share repurchase program.

The results come about two weeks after DuPont's stock suffered its biggest selloff in more than 15 years after the company issued a profit warning for the first quarter, citing additional inventory destocking by customers and continued weak demand in China.

The stock (DD) rose 2.1% in premarket trading, after closing Monday at a 15-month low. The stock had tumbled 18% since the profit warning.

The company said while the timing of a recovery of the inventory destocking remains uncertain, it was optimistic about the outlook for the chip business.

"We continue to see demand stabilization within Semiconductor Technologies and Interconnect Solutions and we remain confident of a broad-based electronics materials recovery in 2024," said Chief Executive Ed Breen.

Separately, DuPont raised its quarterly dividend by 5.6% to 38 cents a share, from 36 cents a share. The new dividend will be payable on March 15 to shareholders of record on Feb. 29.

Based on Monday's stock closing price of $61.21, the new annual dividend rate implies a dividend yield of 2.48%, above the yields for the Materials Select Sector SPDR ETF XLB of 2.11% and the S&P 500 index SPX of 1.45%.

The company also said that after completing the $2 billion to repurchase program launched in September 2023, it launched a new $1 billion buyback program.

For the fourth quarter, the company swung to a net loss of $22 million, or 5 cents a share, from net income of $4.23 billion, or $8.83 a share, in the same period a year ago.

Excluding nonrecurring items, such as goodwill impairment charges, adjusted earnings per share of 87 cents topped the FactSet consensus of 85 cents.

Sales fell 6.6% to $2.90 billion, just below the FactSet consensus of $2.92 billion.

For 2024, the company said it expects adjusted EPS of $3.25 to $3.65, surrounding the current FactSet consensus of $3.58, and expects sales of $11.9 billion to $12.3 billion, compared with expectations of $12.3 billion.

DuPont's stock has lost 12% over the past three months through Monday, while the materials ETF has gained 3.3% and the S&P 500 has advanced 13.2%.

-Tomi Kilgore

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02-06-24 0655ET

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