It has been about a month since the last earnings report for DuPont de Nemours (DD). Shares have added about 0.9% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is DuPont de Nemours due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

DuPont's Earnings and Revenues Top Estimates in Q2

DuPont registered a profit from continuing operations of $176 million or 40 cents per share in the second quarter of 2024. In the year-ago quarter, the company recorded a profit of $269 million or 55 cents per share.

Barring one-time items, earnings came in at 97 cents per share in the reported quarter, topping the Zacks Consensus Estimate of 85 cents.

DuPont's net sales reached roughly $3.17 billion, marking a 2% year-over-year increase and surpassing the Zacks Consensus Estimate of $3.04 billion. Organic sales remained flat in the quarter, as a 2% increase in volume was counterbalanced by a 2% decrease in price.

The rise in volume was primarily driven by broad-based growth in the electronics sector. However, this was partially offset by year-over-year declines in industrial businesses, particularly in Water Solutions in China and medical packaging within Safety Solutions.

Segment Highlights

The company's Electronics & Industrial segment reported net sales of around $1.51 billion in the quarter, a 15% year-over-year increase, surpassing our estimate of $1.41 billion. Organic sales grew 8%, driven by a 10% rise in volume, which was partially offset by a 2% decrease in price.

Semiconductor Technologies saw a more than 20% increase in organic sales, fueled by continued recovery in semiconductor demand, advancements in AI-driven technology and higher volumes for OLED materials due to new product launches. Interconnect Solutions experienced low-teens growth in organic sales, with mid-teens volume gains reflecting a broad-based recovery in consumer electronics. Industrial Solutions faced a low-double-digit decline in organic sales, primarily due to ongoing channel inventory destocking in the Kalrez and biopharma markets.

The Water & Protection unit recorded net sales of around $1.39 billion, a 7% decrease from the previous year, surpassing our estimate of $1.36 billion. The decline was due to a 6% drop in organic sales and a 1% currency headwind, with organic sales reflecting a 4% decrease in volume and a 2% decrease in price.

Safety Solutions saw high-single-digit declines in organic sales, mainly due to volume reductions and continued channel inventory destocking for medical packaging products. Water Solutions also experienced high-single-digit declines in organic sales, driven by lower volumes from distributor inventory destocking in China. Conversely, Shelter Solutions achieved low-single-digit growth in organic sales, supported by improved demand in construction markets compared to the prior year.

Financials

DuPont had cash and cash equivalents of around $1.5 billion at the end of the quarter, down around 70% year over year. Long-term debt was roughly $7.17 billion, down about 7.8% year over year.

The company generated operating cash flow from continuing operations of $527 million in the second quarter.

Outlook

DuPont has revised its financial outlook for the year, raising the company’s projections for net sales, operating EBITDA and adjusted EPS. The company now anticipates full-year 2024 net sales to be $12.45 billion, operating EBITDA to be $3.085 billion and adjusted EPS to be $3.75 per share, based on the midpoint of the updated guidance ranges.

For the third quarter of 2024, DuPont expects a return to year-over-year organic sales growth, led by the Electronics & Industrial segment. Sales and earnings growth in the Water & Protection segment are anticipated to begin in the fourth quarter. The company forecasts net sales of $3.2 billion, operating EBITDA of $815 million and adjusted EPS of $1.03 for the third quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, DuPont de Nemours has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, DuPont de Nemours has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

DuPont de Nemours is part of the Zacks Chemical - Diversified industry. Over the past month, Dow Inc. (DOW), a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended June 2024 more than a month ago.

Dow Inc. reported revenues of $10.92 billion in the last reported quarter, representing a year-over-year change of -4.4%. EPS of $0.68 for the same period compares with $0.75 a year ago.

Dow Inc. is expected to post earnings of $0.69 per share for the current quarter, representing a year-over-year change of +43.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.2%.

Dow Inc. has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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