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DuPont (DD) Gears Up for Q1 Earnings: What's in the Cards?

DuPont de Nemours, Inc. DD is scheduled to come up with first-quarter 2023 results, before the opening bell on May 2.

The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of around 13.8%, on average. It posted an earnings surprise of 12.7% in the last reported quarter.

DuPont is likely to have benefited from strong demand in water and general industrial and its pricing and productivity actions in the first quarter. However, its results are likely to reflect the impacts of raw material and energy cost inflation as well as the slowdown in certain markets.
 
DuPont’s shares are down 0.3% over a year compared with 4.7% decline recorded by the industry it belongs to.

 

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Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for DuPont this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.

Earnings ESP: Earnings ESP for DuPont is +1.77%. The Zacks Consensus Estimate for the first quarter is currently pegged at 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DuPont currently carries a Zacks Rank #3.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for the first quarter for DuPont is currently pinned at $2,938 million, suggesting an expected year-over-year decline of 10.3%.

The consensus estimate for the company’s Electronics & Industrial segment is pinned at $1,311 million, indicating a 14.6% year over year decline. The same for the Water & Protection unit is pegged at $1,347 million, suggesting a 5.7% year over year decline.

Some Factors to Watch For

DuPont is expected to have benefited from healthy underlying demand in several end markets, including water and general industrial in the March quarter. It is expected to have witnessed sustained strength in water and automotive adhesives and stable demand across industrial end-markets including aerospace and healthcare.

The company is also likely to have benefited from its cost and productivity actions in the quarter to be reported. Its structural cost actions are likely to have contributed to its bottom line in the quarter.

DuPont is also expected to have gained from its pricing actions. It continues to implement strategic price increases to offset the cost inflation. These actions are likely to have supported its results in the first quarter.

However, the company is likely to have faced challenges from higher raw material and logistics costs in the first quarter. Supply constraints for major raw materials are expected to have continued in the quarter. Higher energy costs driven by the Russia-Ukraine conflict are also expected to have impacted its results.

DuPont is also expected to have witnessed softness in the consumer electronics and semiconductor markets in the March quarter. It is expected to have witnessed lower volumes during the quarter in consumer electronics and semiconductors due to reduced consumer spending, inventory destocking and the impacts of COVID-related restrictions in China. A slowdown in semiconductor fab production rates may also have impacted its performance in the first quarter.

 

DuPont de Nemours, Inc. Price and EPS Surprise

 

DuPont de Nemours, Inc. Price and EPS Surprise
DuPont de Nemours, Inc. Price and EPS Surprise

DuPont de Nemours, Inc. price-eps-surprise | DuPont de Nemours, Inc. Quote

 

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:

Albemarle Corporation ALB, slated to release earnings on May 3, has an Earnings ESP of +0.80%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Albemarle’s earnings for the quarter is pegged at $6.93. ALB currently carries a Zacks Rank #3.

Axalta Coating Systems Ltd. AXTA, slated to release earnings on May 2, has an Earnings ESP of +4.35%.

The consensus estimate for Axalta Coating Systems’ earnings for the first quarter is currently pegged at 31 cents. AXTA currently carries a Zacks Rank #3.

Pan American Silver Corp. PAAS, scheduled to release earnings on May 10, has an Earnings ESP of +167.10% and currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Pan American Silver’s first-quarter earnings has been revised 66.7% upward in the past 60 days. The consensus estimate for PAAS’ earnings for the first quarter is currently pegged at 5 cents.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report

Albemarle Corporation (ALB) : Free Stock Analysis Report

Pan American Silver Corp. (PAAS) : Free Stock Analysis Report

Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report

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Zacks Investment Research