DuPont lifts first-quarter outlook, shores up balance sheet as COVID-19 clouds

DuPont lifted its first-quarter earnings outlook as the coronavirus disease 2019 (COVID-19) pandemic bolsters demand for products such as Tyvek protective fabric, but withdrew its full-year guidance and announced steps to improve its balance sheet because the virus’s longer-term impacts on markets such as automotive and oil and gas remains unclear. 

DuPont expects first-quarter 2020 adjusted earnings of $0.82–0.84/share, well above the analysts’ consensus estimate of $0.68/share, as reported by Refinitiv (New York), and the company’s initial first-quarter guidance of $0.70–0.74/share, issued on 11 March. 

First-quarter net earnings are expected to be $.70–$1.00/share, on net sales of approximately $5.2 billion. The company expects a first-quarter loss from continuing operations in the range of $510–725 million operating EBITDA of approximately $1.3 billion.

The company acknowledged significant uncertainty for the rest of the year and weakness in automotive, oil and gas, and industrial markets due to COVID-19, and withdrew its full-year guidance. “As this pandemic expands globally, the uncertainty around demand in select end-markets continues,” said Ed Breen, Executive Chairman and CEO. “In response, we continue to advance initiatives to improve our working capital and have taken steps to delay certain capital investments and idle production at several manufacturing sites.” 

The company entered into a 364-day, $1.0-billion revolving credit facility, replacing the $750 million revolving credit facility that was set to expire in June 2020, and secured a $2.0-billion, 364-day delayed-draw facility ensuring its ability to meet the November 2020 maturities. “Securing these two new facilities further strengthens our near-term liquidity position,” Breen says. “Additionally, we now have committed financing in place to bridge our debt maturing in November 2020 to the receipt of the special cash payment in connection with the Nutrition & Biosciences and IFF transaction. Combined with our existing cash balances and available borrowings through our commercial paper program, these facilities provide the liquidity needed to navigate these uncertain times.”

DuPont has also idled production at several manufacturing sites, predominantly production plants within the transportation and industrial segment, due to significant downturn in automotive production. 

The company will report first-quarter results on 5 May.