Chemical giant DuPont de Nemours Inc (NYSE:DD, ETR:6D81) said it is expecting a hit to its first-quarter sales due to tepid demand from China.
The company forecasts first-quarter net sales at approximately $2.8 billion, below analyst estimates of $3.03 billion.
DuPont attributes the dip to "inventory destocking within industrial businesses" and persistent weak demand in China, according to CEO Ed Breen.
The shares tumbled over 13% in early Wednesday trading, wiping more than $3 billion from DuPont's market capitalization.
Breen told shareholders that the company is focused on operational measures within its control, generating strong cash during Q4, in a “continually lower volume environment.”
He acknowledged ongoing challenges, citing additional channel inventory destocking in industrial businesses and sustained weak demand in China.
The company also warned of a non-cash goodwill impairment charge, ranging from $750 million to $850 million, at its Protection reporting unit. DuPont expects these challenges to persist into the first quarter of 2024.
Breen expects sequential declines in sales and earnings in Q1, driven by these factors and the absence of certain discrete items that benefited Q4 operating EBITDA.
The company expects sequential sales improvement and approximately a 10% operating EBITDA increase in Q2 from Q1, along with a return to year-over-year sales and earnings growth in the second half of 2024.
A full report on Q4 and 2023 earnings is slated for release on February 6.