(Reuters) – DuPont (DD.N) reported a bigger second-quarter loss on Thursday and wrote down the value of its automotive business by $2.5 billion, one of its biggest markets that has been hard hit by the COVID-19 pandemic.
Yet DuPont, which makes materials used in products ranging from engine covers to brake fluid, said it was starting to see a rebound in the auto sector with orders picking up in mid-July, and expected 2021 to be a “decent” year for the sector.
Chief Executive Officer Ed Breen said DuPont had likely seen the worst in the second quarter even as a second wave of virus cases remains a threat, but the recovery would be measured and uneven.
“In markets like automotive and residential construction, we have seen an inflection in demand heading into the third quarter, but believe recovery will be gradual,” Breen said on a post-earnings call.
DuPont projected adjusted earnings between 71 and 73 cents for the current quarter, marginally above analysts’ estimate of 71 cents, according to Refinitiv IBES data.
It also beat estimates for quarterly adjusted profit and revenue, helped by cost cuts and higher organic sales in its nutrition and electronics units, which benefited from a surge in demand for food ingredients and memory chips.
Excluding one-off items, DuPont earned 70 cents per share, beating analysts’ 59 cent estimate, with $4.8 billion in sales also a touch above estimates. The non-cash impairment charge in its Transportation and Industrial segment, however, pushed attributable net loss to $2.48 billion, or $3.37 per share, in the quarter ended June 30.
DuPont said it took the charge to account for the prolonged weakness in automotive sector and it was not associated with tangible assets of the Transportation and Industrial segment.
Shares of the company were down 3.8% at $53.26 in early trading.
Reporting by Taru Jain in Bengaluru; Editing by Arathy Nair and Tomasz Janowski