DuPont Beat Earnings Expectations and Announced a Dividend Boost. Why the Stock Is Falling.

DuPont shares (ticker: DD) were up 5.6%, at $79.58, in recent trading. The S&P 500 was down 0.2%, and the Dow Jones Industrial Average was up 0.3%.

DuPont reported $1.06 a share in adjusted fourth-quarter earnings from $4.3 billion in sales. Wall Street was looking for earnings of 99 cents from $4 billion in sales. A year ago, DuPont reported 95 cents in adjusted per-share earnings from about $3.8 billion in sales.

The company will raise its quarterly dividend to 33 cents a share from 30 cents.

“Our fourth-quarter financial results reflect a disciplined focus on pricing actions and operational excellence in a sustained environment of unprecedented global supply chain challenges and rising inflation,” said CEO Ed Breen.

The difficult operating environment is reflected in DuPont’s financial guidance for 2022. The company expects to generate about $4.75 in per-share earnings from $17.6 billion in sales. Wall Street is looking for earnings of $4.88 a share and $17.1 billion in sales.

Sales look good, but inflation and supply-chain pressures look like they are affecting profitability.

“Consumer demand remains strong, however raw material and logistics cost inflation is expected to continue to impact margins,” said Chief Financial Officer Lori Koch. “We expect operating [profit] margin in first quarter 2022 to be about flat with fourth quarter 2021 with continued improvement throughout 2022 to more normalized levels in the back half of the year.”

A lot of companies are projecting improvement in the second half of 2022, including Honeywell International (HON) and Ford Motor (F). Investors sold both stocks after each reported fourth-quarter numbers.

Coming into the fourth-quarter earnings report, DuPont stock was down about 7% year to date and 1% over the past 12 months.

Write to Al Root at [email protected]