DuPont sees a big jump in inflation costs for the rest of the year

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DuPont de Nemours Inc. jumped on the commodity inflation train that many industrial companies have addressed this earnings reporting season, saying it expects the impact of second-quarter commodity inflation to be more. four times greater than the first. trimester. Specialty materials, chemicals, electronics and agricultural products company DD, -0.15% reported first-quarter earnings and sales on Tuesday that beat expectations, and raised its outlook for the full year.

In the post-earnings conference call with analysts, Chief Executive Ed Breen said that for the first quarter, the impact of commodity inflation was “very small,” about $ 20 million. “We expect that in the second quarter, that will amount to about $ 90 million,” Breen said. “And we expect the annual impact of commodity inflation to be about $ 300 million.” Don’t Miss Out: Companies that make things that are used to make things have seen their profits driven by huge jumps in prices. Is that a bad thing? Breen said the company will be able to offset “most” of the impact of second-quarter inflation through price actions, but not all due to the duration of certain contracts. But for the year as a whole, Breen said he was “very confident” that prices can mitigate the impact of inflation. Overall, he expects prices to rise in the low single-digit percentage range for the year, including “clearly more” increases in the mobility and materials division, “some price increase” in the water and protection division, and ” no price increase “in electronics. Shares of DuPont fell 0.5% in afternoon trading, down from Monday’s six-week closing high of $ 78.28. The stock is up 9.5% year-to-date, while the SPDR Materials Select Sector XLB exchange-traded fund, + 0.50% is up 16.8% and the S&P 500 SPX index, – 1.09% has gained 10.2%. Earnings and sales beat expectations Ahead of Tuesday’s opening bell, DuPont reported that it went to a first-quarter net income of $ 5.39 billion, or $ 8.90 per share, from a loss of $ 616 million, or 83 cents. per share, in the same period of the previous year. Earnings per share, excluding discontinued operations, was 89 cents, and adjusted earnings per share excluding non-recurring items was 91 cents, above the FactSet consensus of 75 cents. During the quarter, DuPont completed the separation of its nutrition and life sciences businesses. Sales increased 8.3% to $ 3.98 billion, topping the FactSet consensus of $ 3.85 billion, while cost of sales also increased 8.3% to $ 2.51 billion. Sales of electronic and industrial products increased 17% to $ 1.3 billion, driven by the strength of semiconductor and smartphone technologies, while sales of water and protection grew 4% to $ 1.3 billion, between strong demand for reverse osmosis and ultrafiltration technologies. For the mobility and materials business, sales increased 11% to $ 1.2 billion, supported by a greater recovery in the automotive and industrial markets. “As we emerge from the COVID-19 pandemic, our leadership positions in the semiconductor, smartphone, automotive, water filtration, and residential construction end markets allowed us to deliver strong first-quarter results ahead of those in expectations with organic sales growth in all three reports. segments, ”Breen said. We achieved these results despite headwinds associated with rising raw material and logistics costs and global supply constraints for key raw materials. ”By 2021, the company raised its adjusted EPS guidance range to $ 3.60 to $ 3.75 from $ 3.30 to $ 3.45, and raised its revenue outlook to between $ 15.7 billion and $ 15.9 billion from between $ 15.4 billion and $ 15.6 billion.