Chemical maker DuPont De Nemours (DD.N) on Wednesday flagged a swing to a loss for the fourth quarter and forecast first-quarter sales below Wall Street estimates, sending its shares tumbling more than 14% to an eight-month low.
The company expects to report a loss from continuing operations of between $220 million and $370 million, as per its preliminary estimates, compared to a profit of $105 million a year earlier.
Destocking by customers clearing excess inventory built up during the COVID-19 pandemic will continue to weigh on sales in its industrial business in the first quarter, DuPont said. The business supplies materials and components used in industries including aerospace, automotive and biopharmaceutical.
"As we finished 2023, we saw additional channel inventory destocking within our industrial businesses as well as continued weak demand in China," CEO Ed Breen said in a statement.
DuPont estimated sales to be about $2.8 billion for the first quarter, compared with analysts' average estimate of $3.04 billion, as per LSEG data.
"DuPont appears to see destocking in it industrial business occur later relative to most chemical companies we follow. The sector on average saw more pronounced destocking earlier in 2023," KeyBanc Capital Markets Aleksey Yefremov said to Reuters.
The Wilmington, Delaware-based company will also take a non-cash goodwill impairment charge of between $750 million and $850 million in the fourth-quarter at a unit of its water and protection segment due to market conditions.
DuPont is set to publish its fourth-quarter results on Feb. 6 before the bell.
