DuPont de Nemours, Inc. DD recorded a loss (on a reported basis) from continuing operations of $3.37 per share for second-quarter 2020, wider than a loss of $1.48 per share in the year-ago quarter.
The bottom line in the reported quarter was hurt by a $2.5 billion non-cash impairment charge in the company’s Transportation & Industrial segment, resulting from the global slowdown in the automotive industry due to the coronavirus pandemic.
Barring one-time items, earnings came in at 70 cents per share for the reported quarter, topping the Zacks Consensus Estimate of 59 cents.
DuPont raked in net sales of $4,828 million, down 12% from the year-ago quarter. It also surpassed the Zacks Consensus Estimate of $4,685 million.
Net sales fell 10% on an organic basis as growth in Electronics & Imaging and Nutrition & Biosciences units was more than offset by declines in the other segments.
DuPont de Nemours, Inc. Price, Consensus and EPS Surprise
DuPont de Nemours, Inc. price-consensus-eps-surprise-chart | DuPont de Nemours, Inc. Quote
Segment Highlights
The company’s Electronics & Imaging segment recorded net sales of $905 million in the reported quarter, up 5% on a year-over-year comparison basis. Organic sales rose 7% on 7% higher volumes. Strong volume gains in Semiconductor Technologies more than offset softer demand across Interconnect Solutions and Image Solutions.
At the Nutrition & Biosciences unit, sales were down 1% year over year to $1.5 billion. Organic sales rose 1% year over year on 1% higher volumes. The company saw strength across food & beverage and health & wellness end markets.
Net sales for the Transportation & Industrial division were $832 million in the reported quarter, down 34% year over year. Organic sales fell 33% on 5% lower pricing and 28% volume decline due to weakness in the automotive market.
Net sales in the Safety & Construction unit were $1.2 billion, down 7% year over year. Organic sales fell 8% as 2% price improvement was offset by 10% lower volume. The company saw strong demand for Tyvek protective garments.
In the non-core reporting segment, net sales fell 30% year over year to $308 million. Organic sales declined 20%, impacted by 22% lower volumes. Prices rose 2% in the quarter.
Financials
DuPont had cash and cash equivalents of $3,737 million at the end of the quarter. Long-term debt was $15,608 million.
The company also generated operating cash flow of $802 million and free cash flow of $564 million in the reported quarter.
Outlook
DuPont sees sales to be modestly up in the third quarter on a sequential comparison basis. A recovery in automotive and residential construction is expected to be mostly offset by seasonal patterns in Nutrition & Biosciences and the effects of supply constraints in Tyvek. The company also expects aerospace, industrial, oil & gas commercial construction markets to remain challenged. DuPont expects adjusted earnings per share for the third quarter in the band of 71-73 cents.
Price Performance
DuPont’s shares are down around 13.6% year to date compared with a 10.3% decline recorded by the industry.
Zacks Rank & Key Picks
DuPont currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX and Kinross Gold Corporation KGC.
Royal Gold has a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained around 17% in a year. It currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company’s shares have rallied roughly 101% in a year. It currently carries a Zacks Rank #2 (Buy).
Kinross Gold has an expected earnings growth rate of 85.3% for the current year. The company’s shares have shot up around 107% in the past year. It presently carries a Zacks Rank #2.
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