DuPont raised its full-year profit and sales guidance on Monday after first-quarter results beat expectations, with the company implementing surcharges and price increases to offset higher input costs tied to the U.S. and Israel's war with Iran.
The chemical maker posted adjusted EPS of $0.55, topping estimates, and now expects about 1% of organic growth to come from pricing actions
Yuriko Nakao / Getty Images
DuPont raised its full-year profit and sales guidance on Monday after first-quarter results beat expectations, with the company implementing surcharges and price increases to offset higher input costs tied to the U.S. and Israel's war with Iran.
Adjusted earnings per share came in at $0.55 for the quarter ended March 31, a 53% improvement from the prior-year period. Revenue of $1.68 billion reflected a 4% year-over-year gain, driven by 2% organic growth alongside a 2% currency tailwind. Analysts had expected adjusted EPS of $0.48, according to Reuters.
For the full year, DuPont now expects adjusted EPS of $2.35 to $2.40, up from prior guidance of $2.25 to $2.30. Full-year net sales guidance was raised to $7.155 billion to $7.215 billion, compared with a prior range of $7.08 billion to $7.14 billion. For the second quarter, the company projected adjusted EPS of about $0.59 and net sales of about $1.8 billion, the company said.
"Our full year net sales guidance now assumes about 4% organic growth, including about 1% of pricing due to actions taken to fully offset higher input costs related to the Middle East conflict," CFO Antonella Franzen said in a statement.
On a post-earnings call with analysts, Franzen said DuPont has implemented surcharges and price increases to cover incremental costs, with a roughly $90 million impact expected to be fully covered starting in the second quarter, according to Reuters. Executives also said the company estimates about $30 million in stranded costs, with roughly $10 million expected to be removed this year.
The escalation of the Middle East conflict has disrupted oil and petrochemical flows through the Strait of Hormuz, tightening global chemical supply and raising prices of plastics, polymers, and resins, according to Reuters. The outbreak of the Iran war sent crude oil prices sharply higher, embedding energy costs throughout manufacturing, freight, and other inputs that chemical producers such as DuPont rely on.
In the Healthcare & Water Technologies segment, quarterly net sales of $806 million were 6% above year-ago levels, with organic growth contributing 3 percentage points. Within Healthcare Technologies, demand from medical packaging and biopharma customers powered high-single-digit organic gains. Water Technologies was weaker, with logistics disruptions in the Middle East offsetting strength in industrial water and microelectronics markets, the company said.
Diversified Industrials brought in $875 million in net sales, a 3% rise, but organic growth was unchanged from the prior year. Strength in aerospace and automotive could not overcome weakness in printing, packaging, and construction, the company said.
Companywide operating EBITDA reached $414 million, a 15% increase, and the accompanying margin widened by 230 basis points to finish at 24.6%.
DuPont also announced a $275 million accelerated share repurchase expected to launch imminently. The company completed the sale of its Aramids business to Arclin on April 1 for total consideration including approximately $1.2 billion in pre-tax cash proceeds, a $300 million note receivable, and a non-controlling equity interest valued at $325 million, the company said.
DuPont stock rose as much as 7.4% in early trading.
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