DuPont beats profit estimates, launches $5 bln share buyback plan

DuPont de Nemours (DD.N) topped Wall Street expectations for third-quarter profit as increased pricing and strong demand for its electronics and other industrial products helped the company beat mounting costs, sending its shares up nearly 6%.

The industrial materials maker also announced a new $5 billion share repurchase program and said it would retire $2.5 billion in long-term debt.

Double digit revenue jump in select segments, including water and auto adhesives, as well as an 8% hike in pricing helped offset the inflationary headwinds, DuPont Chief Executive Officer Ed Breen said on a post-earnings call.

The company has been grappling with rising costs for raw materials and energy due to decades-high inflation that was prompted by the pandemic and now intensified by Russia’s invasion of Ukraine.

It expects cost to rise to about $800 million in the year from its previous estimate of $700 million, mainly due to higher energy prices in Europe.

But the cost pressures would subside heading into 2023, as raw material prices have started to normalize, the company said.

“Commodities are definitely coming down pretty uniformly. So if the natural gas thing settles out, I think we’ve peaked on all this inflation,” Breen said.

Sales from the electronics and industrial unit, one of the company’s highest revenue generating segments, rose 2.9% to $1.51 billion in the reported quarter, while the water and protection segment raked in $1.53 billion, up nearly 10% from a year earlier.

DuPont’s revenue rose to $3.3 billion in the three months ended Sept. 30, compared with analysts’ average estimate of $3.2 billion.

Its adjusted earnings of 82 cents per share also beat estimates of 79 cents per share.

Meanwhile, net income fell to $376 million, or 73 cents per share, from $404 million, or 75 cents per share, a year earlier.