DuPont expects costs to balloon in 2022
11:09 am Tuesday, August 02nd, 2022
By Rithika Krishna
(Reuters) -DuPont de Nemours is expecting to take a bigger hit from costs related to logistics, raw materials and energy for the year, although price increases helped the industrial materials maker battle inflationary pressures in the latest quarter.
A host of factors ranging from the supply-chain crisis to the Ukraine war has sent inflation to levels not seen in decades, driving companies to reassess their sales and production strategies and keep a close watch on costs.
Expenses are likely to balloon to about $700 million from its previous projection of $600 million, Chief Financial Officer Lori Koch said on a post-earnings call, with its unit that provides water treatment and purification technologies expected to see the biggest surge.
Dupont also said net sales and core operating earnings in the current quarter would be slightly weaker than in the second, due to currency headwinds and the absence of sales contribution of biomaterials unit, which was hived off in June.
Shares of the company fell 1% after it also trimmed its full-year earnings estimates.
It now expects adjusted profit of $3.27-$3.43 per share, compared with its previous forecast of up to $3.5 per share, and revenue of $13 billion-$13.4 billion, compared with up to $13.7 billion estimated earlier.
Sales from electronics and industrial business, one of the company’s highest revenue generating segments, rose 16% from a year earlier, while sales at its water and protection segment were up 6%.
The company’s quarterly adjusted profit of 88 cents per share came above market estimates of 75 cents per share, according to Refinitiv IBES data.
Total sales jumped 7% to $3.32 billion, beating estimates of $3.25 billion.
(Reporting by Rithika Krishna in Bengaluru; Editing by Rashmi Aich and Anil D’Silva)
