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LivestreamMenuDuPont on Tuesday issued soft guidance for the second half of the year, overshadowing solid second-quarter results despite disruptions from the war in Iran. There’s still plenty to like about the streamlined company, as it improves profitability and grows its exposure to healthcare and clean-water technology. Revenue rose 4% year over year to $1.82 billion, topping the $1.81 billion consensus, according to estimates compiled by LSEG. Adjusted earnings per share (EPS) totaled $1.88, a healthy beat versus the $1.76 consensus, LSEG data showed. Compared with a year ago, adjusted EPS rose 48%. DuPont’s results and guidance weren’t as bad as early-morning trading indicated, when shares opened down nearly 8%. The market is, thankfully, recognizing that was an overreaction and buyers have stepped in, with shares now down less than 1% in the afternoon. DuPont entered Tuesday’s session up a respectable 17% year to date, outperforming the S & P 500 ‘s roughly 11% advance. But the stock’s highest close of the year — at almost $155 a share — came all the way back on Feb. 11. Why we own it DuPont has wisely simplified its portfolio by spinning off its electronics division into a standalone company, Qnity, and selling its synthetic fibers business behind Kevlar bulletproof vests. The remaining DuPont sells a range of materials and components used across the healthcare, water, and broader industrial end markets. We believe an improved operational focus, coupled with the capacity to do smart M & A, makes DuPont a worthy stock to own in a diversified portfolio. Competitors: 3M , PPG Industries Portfolio weighting: 1.79% Most recent buy: Aug. 5, 2025 Initiated: Aug. 7, 2023 Bottom line DuPont turned in a respectable quarter considering that one of its most attractive long-term businesses — supplying clean-water technology to customers in the Middle East — is facing disruptions due to the war. Countries in the region are heavily reliant on DuPont’s powerful filtration and purification products for drinking water. DuPont said weakness in the Middle East was a drag on growth in the quarter, but the good news is that the company expects improved performance in the water business in the second half of this year compared with the first six months, CEO Lori Koch said on the conference call with investors. A few large projects in the Middle East will help drive that improvement, Koch said. “We’ve still got visibility to those. They’re still on our books. We’ve continued to expect that most of that revenue hits in the fourth quarter versus the third quarter.” She added that “nothing [is] structurally changing in the business in the long term,” noting that water projects outside the Middle East are also contributing to growth this year. Of course, DuPont cannot control whether there’s a durable resolution to the Iran war. But it’s safe to say that anything that keeps the fighting at bay and traffic moving through the Strait of Hormuz is beneficial to the company’s performance later this year and beyond. On Tuesday, at least, there’s renewed optimism about a potential deal between the U.S. and Iran. That’s fueling a rally in the broader stock market and likely helping DuPont shares recover too. DuPont’s guidance is another question mark hanging over the earnings release. When the results came out earlier in the morning, DuPont didn’t provide third-quarter estimates — only a combined second-half outlook covering both the September and December quarters. Not only did this raise concerns about a fourth-quarter skew to the guidance, but the second-half projections for operating EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EPS looked a bit light versus consensus expectations. This dampened any enthusiasm around DuPont boosting its full-year outlook for organic sales growth, operating EBITDA and adjusted EPS. While not ideal, the reality is that the management team of Koch and CFO Antonella Franzen has proven to issue conservative guidance. With a still-unresolved Middle East conflict, we understand the desire to stick with that approach. Additionally, DuPont did end up providing third-quarter expectations during the earnings call. Unsurprisingly given its exclusion from the press release, it was weaker than expected. But at least it was provided, and that will help Wall Street model next earnings season. Now, let’s focus on the clear-cut positives in the release, aside from the top- and bottom-line beat. Among them: DuPont’s business supplying ultra-pure water technology to semiconductors is booming, healthcare is chugging along nicely, and the long-sluggish construction market started to show improvement. Additionally, companywide operating EBITDA and margin for the quarter came in ahead of expectations — exactly what you want to see because the point of spinning off Qnity Electronics and becoming a leaner company is to get more efficient and profitable over time. DuPont still has “stranded costs” left over from the Qnity separation last fall, but management has committed to getting rid of them within the first two years. Tuesday’s second-quarter results indicate the company is progressing nicely on its simplification goals. We’re also supportive of another $250 million in stock repurchases set for the third quarter, after buying back a similar amount during the second quarter. We also continue to watch for DuPont to make any bolt-on acquisitions to fortify its higher-growth businesses like water and healthcare; Koch indicated on the call that DuPont has the financial capacity to make a deal, but doesn’t want to pull the trigger unless the valuation is appropriate. Putting it all together, this wasn’t the cleanest DuPont quarter, and the fate of the Iran war remains hard to predict. But DuPont continues to offer diversification in our portfolio as an industrial company not overly exposed to the data center — in contrast to Eaton — with a clear roadmap for improving profits. We’re reiterating our hold-equivalent 2 rating and price target of $165. Quarterly commentary Healthcare & Water is the most exciting of DuPont’s two reporting segments. On the healthcare side, it is home to sales of specialized medical packaging, protective garments, components for medical devices, and materials used in biopharmaceutical manufacturing, such as silicone tubing. The water business is all about filtration and purification technology, used to turn salt water into drinkable water — a process known as desalination — and in industrial applications, like wastewater treatment and creating ultra-pure water for semiconductor manufacturing. Healthcare & Water segment revenue of $856 million was a tiny miss, as seen in the chart above. But operating EBITDA was ahead of expectations. And while the segment’s operating margin contracted from the year-ago period, finance chief Franzen said the decline was partially driven by investments in growth and a slightly less profitable mix of products sold. “Overall, our underlying margins in the healthcare and water business are very strong,” she said. The Healthcare Technologies unit’s organic growth was in the mid-single digits, with the strongest growth in the protective garments and biopharma. On the earnings call, chief executive Koch mentioned that DuPont has embraced AI tools to accelerate the time it takes for its salesforce to get out into the market pitching garment customers. She said in the past it used to take “a couple months to be able to get ready to launch. Now we did it in four weeks. The AI is really helping on the pace.” While that’s not a thesis-changing update, it’s intriguing and bears watching to see if the technology helps other parts of the business. Water Technologies’ organic growth was in the low-single digits, with Franzen saying the semiconductor business was up “in the 20% plus range.” The broader industrial water business was up double-digits. However, this strength was offset by the aforementioned weakness in the Middle East, which represents about 10% of sales. Franzen said the segment’s organic growth was up mid-single digits ex-Middle East. DuPont’s Diversified Industrials segment is home to sales of building materials such as Tyvek HomeWrap, Styrofoam insulation, and Corian, a material used for countertops, sinks and walls. These products are used in both residential and non-residential construction. The other portion of the business is focused on industries including automotive, aerospace, printing, and packaging. The products sold include engineered components, adhesives, and special greases used by the auto and oil industries, among others. DuPont materials sold under the Vespel brand, designed to withstand extreme heat and pressure, are on over 95% of commercial aircraft being flown today. Diversified Industrials segment revenue of $963 million was a beat, as was operating EBITDA and margin. The segment’s margins also expanded year over year, which hopefully continues in future quarters as the benefits of being a more streamlined company accrue. The Building Technologies unit saw organic sales growth in the low-single digits. With such a sluggish U.S. housing market, this has been one of the softest parts of the DuPont portfolio in recent quarters. But we were actually encouraged to see modest growth, an improvement from low-single-digit declines in the March quarter and high-single-digit declines in the fourth quarter of 2025. Franzen said both the residential and non-residential construction markets drove the growth in the April-to-June period, led by Asia Pacific. Within the residential side, Franzen said DuPont grew faster than the overall market thanks to its “nice position” in multifamily construction, like apartments. “I would say single-family homes continue to be very soft in the space,” she said. Industrial Technologies’ organic growth was in the mid-single digits, with the aerospace and electric vehicle battery businesses seeing double-digit growth. Those are two of the most attractive industrial markets that DuPont serves, so it’s good to see growth here far outpacing the overall company. Guidance Here’s DuPont’s second-half guidance, which, as mentioned, is likely driving some of the weakness in the stock Tuesday: Net sales in the range of $3.66 billion to $3.69 billion, translating to a midpoint of $3.68 billion. That’s a slight beat versus the FactSet consensus of $3.66 billion. Operating EBITDA in the range of $890 million to $910 million, which at the midpoint of $900 million is a minor shortfall versus the $906 million consensus. Adjusted EPS between $3.65 and $3.80, resulting in a midpoint of $3.73. That’s also a small miss compared with expectations of $3.75. Here’s DuPont’s revised full-year guidance: Organic sales growth slightly above 4%, up from the prior expectation of about 3%. Net sales between $7.16 billion and $7.19 billion, resulting in a new midpoint of $7.18 billion. This is slightly below the prior range’s midpoint of $7.19 billion. However, it is above the consensus of $7.16 billion. Operating EBITDA in the range of $1.75 billion to $1.77 billion, translating to a midpoint of $1.76 billion. This topped estimates of $1.75 billion and represented a $15 million increase from the midpoint. Adjusted EPS in the range of $7.17 to $7.32, resulting in a midpoint of $7.25, topping the consensus of $7.15. The prior guidance was $7.02 to $7.16. All estimates above are from FactSet. (Jim Cramer’s Charitable Trust is long DD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.Read More
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