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Call sheet · Q1'26

DuPont de Nemours (DD)

Q1'26 earnings call · held May 5, 2026 · compared with the Q4'25 call · management-credibility review
9/12
Disclosure score
4 medium, 4 low flags
Financial quality
Bottom line
The sleeper story everyone's missing: water business is actually decelerating even without Middle East disruptions, going from expected growth to 'flat to slightly down' - that's a demand issue they're burying in logistics headlines. The obvious margin expansion story is real but volatile, with 40% of Q1 gains from mix that reverses in Q2. The binding constraint is their short sales cycle (80% of monthly orders come in-month) which means they have limited visibility into the industrial recovery they're betting on. Most telling quote: on 80/20 benefits they went from specific '$30M within first 2 years' to vague 'over time' - that's not the transformation catalyst they sold. My view changes if water shows organic growth in Q2 or they provide specific 80/20 implementation timeline with margin targets.

The 30-second version

  • Middle East disruption masking deeper water business weakness - they're calling $10M logistics issue temporary but order timing suggests broader industrial demand softness
  • Margin expansion story intact but mix dependency is real - 50 bps from mix, 70 bps from productivity in Q1
  • They stopped talking about 80/20 impact timeline and quietly downgraded Aramids proceeds language

What changed this quarter

MetricQ4'25Q1'26Change
Net Sales$1.7B (flat YoY)$1.7B (+4% YoY)+400 bps acceleration
Organic Sales Growth1% decline (adj. for timing)2% growth+300 bps sequential improvement
Operating EBITDA Margin24.2% (+80 bps YoY)24.6% (+230 bps YoY)+40 bps sequential expansion
Healthcare & Water Sales$821M (+4% YoY)$806M (+6% YoY)+200 bps acceleration despite lower absolute
Healthcare Organic GrowthMid-single digitsHigh single digitsClear acceleration in core growth driver
Water Organic GrowthLow single digitsDown low-to-mid single digitsSharp deceleration, even ex-Middle East impact
Diversified Industrials Sales$872M (-3% YoY)$875M (+3% YoY)+600 bps turnaround
Diversified Industrials OrganicDown 2% (adj.)About flat+200 bps improvement but still no growth
Free Cash Flow ConversionExpected >90% for 202665% in Q1Solid start, maintains full-year target
Full Year EPS Guidance$2.25-2.30$2.35-2.40+$0.10 raise, 40% reported growth

Accountability tracked

8 new promises made5 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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