DuPont de Nemours, Inc. (DD) Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 delivered organic sales growth and margin expansion: net sales $3.07B (+5%; +6% organic), operating EBITDA $788M (+16%), and adjusted EPS $1.03 (+30% YoY); GAAP EPS was $(1.33) driven by a $768M non‑cash goodwill impairment tied to segment realignment .
- Results beat Street on key metrics: revenue $3.066B vs $3.043B consensus (+$23M), adjusted EPS $1.03 vs $0.95 consensus, EBITDA $788M vs $761M consensus; strength concentrated in ElectronicsCo (+14% organic) and Healthcare/Water within IndustrialsCo (+low‑teens organic)*.
- Guidance: Q2 2025 outlook of ~$3.2B revenue, ~$$815M operating EBITDA, and ~$1.05 adjusted EPS; full‑year 2025 maintained at $12.8–$12.9B revenue, $3.325–$3.375B operating EBITDA, and $4.30–$4.40 adjusted EPS . Management added tariff sensitivity of
$60M net cost ($0.10/share) not included in guidance . - Strategic milestones: Electronics spin announced as “Qnity,” initial Form 10 filed and leadership/board named; separation remains targeted for Nov 1, 2025 .
- Dividend: $0.41 quarterly dividend declared Apr 29, 2025, payable Jun 16, 2025 .
What Went Well and What Went Wrong
What Went Well
- Electronics strength and AI tailwinds: ElectronicsCo net sales +14% (organic +14%), operating EBITDA +26% and margin +340 bps to 33.4%; Semi Tech up low double‑digits on advanced nodes and AI, Interconnect up high‑teens on AI‑driven ramps .
- IndustrialsCo resilience: Healthcare & Water Technologies up low‑teens organically, driving IndustrialsCo operating EBITDA +6% and margin +130 bps to 23.8% .
- Management confidence and tariff mitigation plan: “We remain on track for a November 1, 2025 spin‑off… filing of the initial Form 10” and “Our global manufacturing footprint… serves us well as we manage through the impact of tariffs,” highlighting identified actions to offset most of ~$500M gross exposure, with ~$60M net cost currently estimated .
What Went Wrong
- GAAP loss from continuing operations: $(548)M due to $768M goodwill impairment for Aramids following segment realignment; adjusted EPS used to reflect ongoing performance .
- Cash conversion lighter in Q1: transaction‑adjusted FCF $212M (down 26% YoY) and conversion 49%, reflecting seasonal comp payout and separation costs; management expects acceleration to >90% for full year .
- Pricing and macro pockets of softness: Organic sales mix included price declines (−2% price overall), with Diversified Industrials down mid‑single digits organically on construction and auto headwinds .
Financial Results
Consolidated Quarterly Trend (oldest → newest)
Q1 2025 vs Wall Street Consensus and Guidance
Values retrieved from S&P Global.*
Segment Breakdown – Q1 2025
KPIs – Q1 2025
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “Our results reflect continued strong quarterly financial performance with year‑over‑year organic sales growth and margin expansion in both the ElectronicsCo and IndustrialsCo segments” – CEO Lori Koch .
- “We remain on track for a November 1, 2025 spin‑off of the Electronics business… last week’s filing of the initial Form 10 registration statement” – CEO Lori Koch .
- “Based on tariffs in place today, our estimated cost exposure in 2025 before mitigation action is about $500 million… net cost impact… currently estimated at about $60 million” – CEO Lori Koch .
- “ElectronicsCo… will be one of the largest pure‑play electronics materials and solutions providers… well positioned to benefit from robust growth in semiconductor markets… AI‑driven growth acceleration” – Jon Kemp, CEO‑elect of Qnity .
- “For the second quarter of 2025, we estimate net sales of about $3.2 billion, operating EBITDA of about $815 million and adjusted EPS of $1.05 per share… Our full year 2025 guidance remains unchanged” – CFO Antonella Franzen .
Q&A Highlights
- Tariffs and mitigation split: ~$60M net 2025 impact split evenly ~$30M each between ElectronicsCo and IndustrialsCo; ~6% of COGS exposure for both; additional mitigation actions underway for 2026 .
- Supply chain optimization: majority of China inputs sourced non‑US; alternatives qualified; finished product exports from US to China only ~$200M; intermediates largely mitigable via internal flow changes .
- Water demand drivers: desalination and RO strength; ion exchange opportunities across industrial, food/beverage, microelectronics; PFAS cleanup and direct lithium extraction seen as future upside .
- Aramids impairment context: accounting/realignment driven; no significant change to future cash flows; fair value below carrying due to stand‑alone reporting unit formation .
- PFAS timeline: New Jersey case phases likely through summer; personal injury bellwethers in October; no major developments expected in next ~6 months .
Estimates Context
- Q1 2025 beats vs consensus: revenue $3.066B vs $3.043B*, adjusted EPS $1.03 vs $0.95*, operating EBITDA $788M vs $761M*.
- Q2 2025 guidance modestly below consensus: revenue ~$3.2B vs $3.242B*, adjusted EPS ~$1.05 vs $1.06*, operating EBITDA ~$815M vs $824M*.
- Implication: modest upward revisions possible to Q1‑anchored full‑year segment earnings (electronics, healthcare/water), offset by tariff net headwind disclosure; Street may hold FY guide pending visibility on tariff execution and semi demand normalization*.
Values retrieved from S&P Global.*
Consensus detail
Values retrieved from S&P Global.*
Key Takeaways for Investors
- Q1 quality beat: broad‑based volume strength, margin expansion, and EPS beat driven by electronics AI ramps and Healthcare/Water demand; GAAP loss was non‑cash impairment related to realignment .
- Electronics momentum: strong share/content gains in advanced nodes and packaging; data center exposure (~15% of portfolio) up mid‑teens; positions Qnity for semi‑cycle outperformance .
- Industrials durability: Healthcare and Water growth offsets construction/auto softness; sequential lift expected in 2H for Water systems and med device demand .
- Tariff risk actively managed: ~$500M gross exposure reduced to ~$60M net in 2025 via sourcing, supply chain flex, surcharges, exemptions; even split across segments .
- Guidance intact: Q2 guide implies seasonal lift but some pull‑forward from Semi; full‑year guide maintained, excluding tariff net impact—watch for mitigation progress before guidance embedding .
- Spin readiness catalyst: Qnity brand launch, leadership and board appointments, Form 10 filed; Nov 1 separation target unchanged—potential valuation unlock for pure‑play electronics .
- Capital returns steady: $0.41 dividend declared; cash conversion expected >90% for full year after light Q1 seasonality .