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DuPont Stock Plunges After Company Issues Profit Warning Amid Weak China Volumes

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Key Takeaways

  • DuPont warned that a drop in volumes will drag down fourth-quarter results and affect the current quarter.
  • The chemical giant expects a fourth quarter 2023 loss, and 2024 first quarter profit and sales that are below analysts' forecasts.
  • The company blamed inventory destocking and weak demand in China for the slump.
  • DuPont shares were down 13% at their lowest level since May in mid-afternoon trading.

DuPont (DD) shares plunged Wednesday after the chemical conglomerate issued a profit warning, citing a slump in volumes due to weak demand in China.

The company said that the channel inventory destocking and weak demand from China would affect results for both the fourth quarter and the current quarter. Those factors, as well as the lack of one-off items that benefited EBITDA in the fourth quarter, would lead to a drop in sales and earnings in the first three months of 2024, the company said.

In a statement Wednesday, the company said it anticipates current quarter earnings per share (EPS) of between 63 cents and 65 cents, compared with analysts' expectation of 88 cents. First quarter revenue would be $2.8 billion, again behind the $3 billion projected by analysts.

The company’s preliminary fourth quarter 2023 financial report, meanwhile, showed a loss from continuing operations of between $220 million and $370 million. Preliminary full year 2023 sales were $12.07 billion, below the company's guidance.
Chief Executive Officer Ed Breen said the company remains confident of a broad-based market recovery for electronic materials this year, and along with cost-cutting measures, an improvement in 2024 sales. He forecast a 10% increase in operating EBITDA in the second quarter versus the first.
DuPont noted that its closing procedures for fourth quarter and full year results are not yet complete and could change. It is set to release its final results on February 6.

DuPont shares were down 13.1% at $64.93 at around 2:00 p.m. ET, trading at its lowest level since May.

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