DuPont de Nemours, Inc. DD benefits from its innovation-driven investment, productivity actions and the acquisitions of the Spectrum Plastics Group and Donatelle Plastics. However, weak prices and sizable separation costs are likely to impact its performance.
DuPont, which is among the prominent players in the chemical space along with Dow Inc. DOW, Air Products and Chemicals, Inc. APD and Eastman Chemical Company EMN, remains focused on driving growth through innovation and new product development. Its innovation-driven investment is focused on several high-growth areas. DD remains committed to driving returns from its R&D investment.
The acquisition of Spectrum Plastics Group, a leading manufacturer of specialty medical devices and components, strengthened DuPont’s position in stable and fast-growing healthcare end markets. It is also in sync with its focus on high-growth, customer-driven innovation for the healthcare market. The buyout of Donatelle Plastics also enhances DD’s exposure in healthcare, expanding its expertise in the medical device market segments. The acquisition introduces complementary advanced technologies and capabilities, such as medical device injection molding, liquid silicone rubber processing, precision machining, device assembly and tool building.
DuPont is also benefiting from cost synergy savings and productivity improvement actions. The benefits of its structural cost actions are expected to be realized in 2025. DD also continues to implement strategic price increases in the wake of cost inflation. These actions are likely to support its results. DuPont is also executing additional restructuring actions and expects annualized cost savings of $150 million from these measures.
The company remains focused on driving cash flow and returning value to shareholders. It looks to boost cash flow through working capital productivity and earnings growth. DuPont also remains committed to effective capital allocation. Last month, DD raised its quarterly dividend by 8% to 41 cents per share. It paid $635 million in dividends in 2024 and expects to pay around $640 million in 2025.
Despite these positives, DuPont is facing headwinds from pricing pressure. Volume growth in the fourth quarter was partly offset by lower prices. The company saw lower prices across its segments in the quarter. It expects pricing headwinds to continue in 2025, which may impact its sales and margins.
Hefty costs associated with the separation of the electronics business, slated to be completed on Nov. 1, 2025, are also expected to impact DuPont’s performance in 2025. The company expects costs associated with business separation to be around $700 million, with the bulk of it expected in 2025. These sizable separation costs are expected to impact its margins.
DuPont anticipates full-year 2025 net sales to be in the range of $12.8-$12.9 billion. Operating EBITDA for the full year is forecast to be $3.325-$3.375 billion, while adjusted earnings per share (EPS) are projected to be $4.30-$4.40 for the year.
Another prominent chemical maker, Dow expects to gain from the completion of its near-term incremental growth projects and increased focus on operational discipline in 2025. Dow is optimistic to see a further increase in demand in attractive end markets such as packaging, energy and electronics.
Air Products, on its fiscal first-quarter call, maintained its fiscal 2025 adjusted EPS guidance of $12.70 to $13.00. Air Products expects adjusted EPS to be between $2.75 and $2.85 for the second quarter of fiscal 2025.
Eastman Chemical expects modest volume growth in its specialty businesses in 2025, leveraging its innovation-driven growth model. EMN’s circular platform is expected to drive innovation, with commitments of $75-$100 million in EBITDA growth in 2025. Eastman Chemical expects 2025 EPS to be between $8 and $8.75 and cash from operations to be around $1.3 billion.
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Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report DuPont de Nemours, Inc. (DD): Free Stock Analysis Report Dow Inc. (DOW): Free Stock Analysis Report Eastman Chemical Company (EMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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