By Seher Dareen
(Reuters) -Industrial materials maker DuPont de Nemours (NYSE:DD) said it sees demand returning in China and raised its full-year forecasts on Wednesday, sending shares of the company up 6% in morning trading.
Low demand in key markets, including China, had forced chemical companies to resort to cost cuts and destocking last year, but global manufacturing output is now improving.
China saw some recovery even as factory activity in many Asian economies weakened in March.
Strong growth in the Chinese market boosted net sales in the company's biggest segment, Electronics and industrials (E&I), which posted a 5% rise to $1.37 billion in the first quarter.
This helped the company beat Wall Street estimates for profit for the quarter ended March 31.
DuPont CEO Ed Breen also said the E&I segment would see high single-digit growth in 2025 on artificial intelligence-chip demand.
"I think we're going into a super cycle in semiconductor here over the next decade because of all this AI," Breen said in a conference call.
DuPont raised its 2024 adjusted earnings forecast to $3.45 to $3.75 per share from $3.25 to $3.65 it had previously estimated.
It also lifted full-year sales estimates to between $12.10 billion and $12.40 billion from $11.90 billion to $12.30 billion.
The company said sales and volumes are expected to grow in the second half of the year, driven by recovery in the electronics market and return of volume in the water and protections unit.
"We see the (second-half) ramp as an achievable target, with the potential for another increase later this year," said Aleksey Yefremov, analyst at KeyBanc Capital Markets.