DuPont Q1 Profit Down, Cuts FY23 View; To Buy Spectrum Plastics; Stock Down In Premarket

DuPont De Nemours & Co. (DD) reported Tuesday that its first-quarter profit declined from last year with weak net sales. Further, the company projects sequentially flat adjusted earnings and net sales in the second quarter. The company also adjusted fiscal 2023 outlook to reflect the delay in electronics recovery.

Separately, DuPont announced that it has entered into a definitive agreement to acquire Spectrum Plastics Group from AEA Investors. The purchase price of $1.75 billion will be paid from existing cash balances.

In pre-market activity on the NYSE, DD shares were losing around 4.7 percent to trade at $66.09.

DuPont noted that the net purchase price in the Spectrum deal would be $1.72 billion after tax attributes, subject to customary transaction adjustments.

The transaction is expected to close by the end of the third quarter of 2023, subject to regulatory approvals and other customary closing conditions.

DuPont expects the deal to be immediately accretive to its adjusted earnings per share and to achieve high single-digit ROIC by year five.

Spectrum, an advanced manufacturer of specialty medical devices and components, employs more than 2,200 people.

DuPont’s first-quarter net income available for stockholders fell to $257 million from last year’s $488 million. Earnings per share were $0.56, down from $0.95 last year.

Income from continuing operations was $273 million, compared to $232 million last year. Earnings per share from continuing operations improved to $0.58 from $0.42 last year. Adjusted earnings per share were $0.84, compared to $0.82 a year ago.

On average, 17 analysts polled by Thomson Reuters expected earnings of $1.13 per share for the quarter. Analysts’ estimates typically exclude special items.

Net sales of $3.02 billion decreased 8 percent from $3.27 billion last year. Analysts expected sales of $4.2 billion for the quarter. Organic sales decreased 3 percent versus year-ago period.

Looking ahead for the second quarter, the company projects adjusted earnings per share of around $0.84, and net sales of around $3.02 billion. Analysts expect earnings of $1.1 per share on revenues of $4.17 billion for the second quarter.

Further, for fiscal 2023, the company now said it is adjusting the high-end of existing guidance ranges.

For the full year, the company now projects adjusted earnings per share between $3.55 and $3.70 per share, and net sales between $12.30 billion and $12.50 billion.

DuPont previously projected adjusted earnings in the range of $3.50 to $4.00 per share on net sales between $12.30 billion and $12.90 billion.

Analysts expect earnings of $4.3 per share on revenues of $16.5 billion for the year.

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