DuPont raises annual profit forecast on strong AI-tech demand

11:33 am Tuesday, November 05th, 2024

By Seher Dareen

-DuPont de Nemours raised its full-year profit forecast after topping third-quarter estimates on Tuesday, as the industrial materials maker rides a recovery in demand from semiconductor makers looking to tap a boom in AI technology.

Shares of the company, which makes chemicals and other components that are widely used to manufacture chip circuits, were up more than 5% in early morning trade.

“We are on a larger footprint in China than some of our peers and that’s where a lot of the new (fabrication plants) construction is allotted,” CEO Lori Koch said.

The company’s electronics and industrial unit reported a 13.4% rise in third-quarter net sales.

Overall, further improvement is likely as the semiconductor cycle continued to turn and industrial markets return mid-2025 on lower interest rates, said Aleksey Yefremov, analyst at KeyBanc Capital Markets.

New orders improved in the U.S. manufacturing sector in September and Koch said the U.S. residential construction segment of its business would benefit the most as interest rates fall.

Overall sales in the Asia-Pacific markets jumped 8% from a year earlier, while the U.S. rose 2%.

DuPont said on an earnings call that it expects to complete a planned split of its electronics and water segments closer to the earlier end of the 18-24 months timeline forecast.

The company raised its 2024 adjusted earnings forecast to around $3.90 per share, up from $3.70 to $3.80 it previously forecast. Analysts on average were expecting $3.77 per share, according to data compiled by LSEG.

However, DuPont said it expects annual net sales to be around $12.37 billion, compared with its earlier range of $12.40 billion to $12.50 billion. Analysts were expecting sales of $12.44 billion.

The company flagged normal seasonal declines in the electronics and construction markets in the fourth quarter.

DuPont reported an adjusted profit of $1.18 per share for the third quarter, compared with expectation of $1.03.

(Reporting by Seher Dareen in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila)