DuPont de Nemours Q3 Earnings Call Highlights

Key Points

• DuPont beat its prior third-quarter guidance: sales rose 4% to $1.9 billion, operating EBITDA increased 8% to $469 million, and adjusted EPS climbed 31% to $2.09. Organic growth was 5%, with healthcare and aerospace among the leading markets.
• The company raised its 2026 outlook to about $7.19 billion in sales, $1.785 billion in operating EBITDA, and adjusted EPS of $7.50 at the midpoint; it expects roughly 100% free-cash-flow conversion.
• DuPont completed $350 million in share repurchases during the quarter and plans another $250 million in the fourth quarter. Management also cited about $1.5 billion in capacity for disciplined, growth-oriented acquisitions, particularly in healthcare and water.

DuPont de Nemours NYSE: DD reported third-quarter 2026 results above its prior guidance, citing broad-based sales growth, productivity gains and higher margins. The company raised its full-year outlook for organic sales growth, operating EBITDA and adjusted earnings per share while outlining further share repurchases.

Chief Executive Officer Lori Koch said the company generated 5% organic growth during the quarter, expanded operating EBITDA margin by 90 basis points and increased adjusted EPS by 31% from the prior-year period. She also pointed to strong free-cash-flow conversion and said the company’s order book was up solidly double digits year over year.

Third-Quarter Results

Net sales totaled $1.9 billion, up 4% from the prior-year quarter. Organic sales increased 5%, partly offset by a 1% currency headwind, according to Chief Financial Officer Antonella Franzen. Growth was led by healthcare and aerospace markets, while Building Technologies grew in North America and Asia.

• Operating EBITDA rose 8% year over year to $469 million.
• Operating EBITDA margin was 25.1%, up 90 basis points.
• Adjusted EPS was $2.09, a 31% year-over-year increase.
• Transaction-adjusted free cash flow was $341 million, representing 121% conversion.

Franzen said stronger operations, higher cash balances, capital-allocation actions and a lower tax rate accounted for 24 percentage points of the adjusted EPS increase.

Healthcare & Water Technologies generated $865 million in sales, up 4% on a 4% organic-sales increase. Healthcare sales increased by a mid-single-digit percentage, supported by double-digit gains in personal protection and medical packaging. Water sales rose by a low-single-digit percentage, led by industrial water and double-digit growth in semiconductor and specialty markets. Continued disruptions in the Middle East partly offset those gains; excluding the region, segment organic sales increased by a mid-single-digit percentage.

The segment’s operating EBITDA increased 7% to $263 million, while its margin rose 80 basis points to 30.4%.

Diversified Industrials posted sales of $1 billion, rising 4% on 5% organic growth and a 1% currency headwind. Building Technologies grew by a mid-single-digit percentage, supported by North American and Asian demand, share gains in residential building envelopes and pricing. Industrial Technologies also increased by a mid-single-digit percentage, with double-digit gains in aerospace and electric-vehicle battery applications.

Diversified Industrials operating EBITDA rose 11% to $242 million. Its 24.1% operating EBITDA margin was 140 basis points higher than the prior-year quarter.

Productivity, Innovation and AI Initiatives

Koch said DuPont delivered more than 2% net productivity during the quarter, contributing about 100 basis points of EBITDA-margin improvement before being partly offset by growth investments. The company is targeting a 3% net productivity reduction in cost of goods sold, excluding volume increases.

The company completed more than 20 Kaizen events during the quarter, focusing on safety, quality, delivery, inventory and cost. On-time-in-full performance improved by more than 100 basis points for the third consecutive quarter, although Koch said the company remains in the low-80% range against its eventual 95% target.

DuPont also discussed investments in artificial intelligence tools across innovation, commercial operations and manufacturing. Koch said AI agents deployed in two businesses reduced the time required to move innovation projects from stage zero to stage one from roughly three months to about five days. An AI-enabled sales initiative in the Tyvek garments business produced approximately $5 million to $6 million of revenue lift, she said.

The company introduced purification technology aimed at peptide therapeutics, including GLP-1 drugs, and launched Tyvek with Renewable Attribution. It also cited recent wins involving BETATECH battery thermal materials, Vespel seals for aerospace fuel-transfer operations, and an EMEA containerized desalination project using ultrafiltration modules.

Raised Full-Year Outlook

DuPont raised its full-year 2026 outlook, now expecting approximately 4.5% organic sales growth and net sales of about $7.19 billion. The updated sales target is $15 million above the midpoint of its previous guidance and at the high end of the prior range.

Full-year operating EBITDA is now expected to reach $1.785 billion, up $25 million from the prior midpoint. That outlook implies approximately 40% incremental operating EBITDA growth and a 24.8% margin, an 80-basis-point year-over-year increase. Franzen said the company expects to fully offset higher input costs with pricing actions already taken.

The company expects adjusted EPS of $7.50 at the midpoint, a $0.25 increase from its earlier forecast and a 22% increase from the prior-year pro forma result. Full-year free-cash-flow conversion is projected at approximately 100%, above DuPont’s 90% target.

For the fourth quarter, DuPont expects net sales of $1.825 billion and roughly 8% organic growth, supported by healthcare, aerospace and industrial-water demand as well as pricing. Operating EBITDA is projected at $455 million, with a 24.9% margin, while adjusted EPS is expected to range from $1.90 to $1.95.

The company said its full-year forecast assumes that certain large Middle East water projects will move into 2027 due to continuing disruptions. Franzen said the projects represented about $15 million pushed from 2026. Excluding the Middle East, Koch said the water business is performing in the mid-single-digit growth range.

Capital Allocation and 2027 Commentary

DuPont completed a previously announced $250 million accelerated share repurchase and substantially completed an additional $100 million of open-market purchases during the third quarter. It plans another $250 million share repurchase in the fourth quarter.

Franzen said buybacks are opportunistic rather than a commitment to repurchase $250 million every quarter. The company reported net debt to EBITDA of 1.1 times and said it retains flexibility for acquisitions. Koch said DuPont has approximately $1.5 billion of capacity for accretive growth-oriented M&A, particularly in healthcare and water, but will remain disciplined on potential deals.

Looking toward 2027, management did not provide formal guidance but said underlying end-market conditions currently appear broadly similar to 2026, excluding uncertainty around Middle East water projects. Koch said automotive production could improve modestly after declining about 1.5% to 2% in 2026, while healthcare, aerospace, EV batteries and water markets outside the Middle East are expected to remain areas of strength.

About DuPont de Nemours (NYSE:DD)

DuPont de Nemours, Inc is a diversified science and technology company that develops engineered materials and specialty products for industrial and consumer markets. Its offerings are used in applications including electronics, semiconductor manufacturing, water purification, transportation, construction, healthcare, and worker and consumer protection.

The company's product portfolio has historically included high-performance films, resins, adhesives, engineered polymers, specialty fibers, protective materials, water-treatment membranes, and filtration technologies.

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