Industrial materials manufacturer DuPont stated Tuesday its Q2 would be the “low point of the year as the COVID-19 pandemic pulls the brakes on global car sales, hurting the company’s automotive enterprise.
The industrial titan is heavily uncovered to the auto sector, which was hard-struck by the U.S.-China trade conflict even before lockdowns imposed to contain the spread of the virus emptied roads and shuttered automotive showrooms.
The corporate stated it recorded a low-to-mid-teens share fall in April gross sales from 2019’s levels. “As we see it now, the second quarter needs to be the low level,” stated Chief Monetary Officer Lori Koch on a conference call with analysts.
He stated DuPont expects continued demand for its products like protective robes and food ingredients; however, that is expected to be offset by the well-known softness in automotive, aerospace, oil and gas, and different industrial segments.
Sales in its transportation and industrial segment (T&I) dropped 13% in Q1, weighed down by lower volumes, and a plunge in prices for nylon, a stiff plastic utilized in making auto parts and industrial tools. DuPont expects nylon prices to continue to plunge sequentially into the current-quarter.
The company, which undertook a cost savings program to fight challenging market conditions, doubled its target to $180 million for the year from $90 million and cut capital expenses by $500 million.
The Wilmington, Delaware-based firm, one of three components into which chemical conglomerate DowDupont was split into in 2019, had earlier withdrawn its full-year estimation, citing uncertainties attributable to the pandemic.