DuPont benefits from pricing power

E.I. DuPont de Nemours & Co, or DuPont, (DD) reported strong earnings results on Tuesday. DuPont generated $7B in revenue, a 17% year-over-year increase for the third quarter.

DuPont has six business segments. Each one generated year-over-year revenue growth in the third quarter. Four of the six experienced positive pricing power: Electronics & Communications, Performance Chemicals, Performance Coatings, and Performance Materials. Only Safety & Protection experienced downward pricing pressure (hurting net sales gains by 1 percentage point), and Agriculture & Nutrition was (surprisingly) flat.

Pricing power was strong even in the U.S. The U.S. generated 31% of DuPont’s revenues for the quarter, 5 percentage points of the 17% increase in sales came from pricing.

As a result, DuPont is bullish about its outlook and expects its positive pricing power to continue (emphasis mine):

“The company expects full-year earnings to be about $3.10 per share, excluding significant items which will include a fourth quarter $.13 per share loss on the early extinguishment of debt. The previous guidance range was $2.90 to $3.05 per share. The increased outlook reflects strong third quarter results and expectations for sustained demand in key global markets, continued pricing momentum and benefits from ongoing productivity.”