DuPont Stock Drops After Earnings. Understanding Spinoffs Can Be Hard.

DuPont reported third-quarter earnings per share of $1.09 from sales of $3.1 billion. (MARK MAKELA/Getty Images)

Key Points

• DuPont reported third-quarter earnings of $1.09 per share on sales of $3.1 billion.
• The company announced a new $2 billion share repurchase program, with $500 million to be executed through an accelerated buyback.
• DuPont’s dividend decreased to 20 cents per share from 30 cents, reflecting the recent spinoff of Qnity Electronics.

The materials company DuPont reported confusing third-quarter results on Thursday, and investors initially weren’t sure what to make of it.

The company announced earnings per share of $1.09 from sales of $3.1 billion. Wall Street was looking for a profit of 45 cents from sales of $2.7 billion, according to FactSet.

Things look great, but those numbers are way off. The consensus numbers aren’t really comparable. They are adjusted for the recent spinoff of Qnity Electronics , which started trading on Nov. 3.

Qnity, which provides chemicals and materials used to manufacture semiconductors and circuit boards, was a significant portion of DuPont’s operations. Sales in 2025 are expected to be about $4.6 billion. DuPont’s remaining sales will be about $6.8 billion.

Looking ahead, DuPont sees fourth-quarter earnings of 43 cents a share from sales of $1.7 billion. Wall Street projects 44 cents and $2 billion, respectively. While that guidance looks light, it isn’t clear if analysts have fully adjusted their sales numbers for the spinoff, which happened only days ago.

Take full-year guidance for earnings before interest, taxes, depreciation, and amortization, or Ebitda. DuPont said it raised full-year 2025 Ebitda guidance to $1.6 billion. The current Wall Street projection on FactSet for the non-Qnity business is $1.9 billion.

Citi analyst Patrick Cunningham wasn’t alarmed by the release. He called the quarter “in line” in a Thursday report. He rates shares Buy and has a $38.90 target price for shares. That is an odd target—it is rare to see cents in a price forecast greater than $10—another consequence of the recent Qnity spin.

It took some time for investors to sort through the release. Early on, they reacted by selling stock. Shares were down more than 5% in premarket trading. Trading settled down, leaving shares off 1.2% for the day at $39.15, while the S&P 500 and Dow Jones Industrial Average fell 1.1% and 0.8%, respectively.

One thing investors have to look forward to is a new share buyback. The company announced $2 billion share repurchase program, and $500 million will be done in an accelerated buyback program.

The new dividend will be 20 cents a share, down from 30 cents. Again, that reflects the fact that DuPont split itself in two.

DuPont shareholders got one share of Qnity for every two shares of DuPont. Qnity will have to pay a 20-cent quarterly dividend to keep dividend income the same post-spin.

Write to Al Root at allen.root@dowjones.com