At DuPont, profits are up, inflation is cooling, and board chief Ed Breen is buying, selling and spinning businesses like a hedge fund

Shares of DuPont de Nemours Inc., the Wilmington-based materials maker, jumped 4% Wednesday after new chief executive Lori Koch and chief financial officer Antonella Franzen said profits would likely top $3 billion for the current year, slightly higher than projected earlier.

Koch credited “recovering” demand for DuPont plastics used in computer chips for artificial-intelligence applications, plus rebounds in construction and medical-packaging orders.

Shares briefly topped $85 late Wednesday morning, a three-year high, and nearly the highest price DuPont has fetched since then-chief executive Edward D. Breen, now the company’s executive chairman, merged DuPont with Dow Chemical in 2017, then split the combined companies into new versions of DuPont and Dow and newly independent pesticide giant Corteva.

DuPont’s results also showed signs of slowing global inflation, as DuPont product prices fell, on average, during the quarter. But Koch said that follows two years in which DuPont was able to raise its prices faster than increases in materials, labor, and transport costs, boosting its profit margins. In China, home to many DuPont customers, sales to chipmakers rose, while water-filtration product sales fell.

On the quarterly conference call with investors, Breen gave new details of his plan for a second three-way split of the company: His managers are picking executives and restructuring finances for DuPont’s $4 billion annual electronics-materials business and its $1.5 billion water-filtration business to spin them off as independent companies.

The spin-offs are “not expected to take place until at least late 2025,” analyst Faisal Hersi told clients of brokerage Edward Jones in a report after Wednesday’s second-quarter DuPont earnings statement.

Even with the morning’s pop in the share price — the closing was $83.70 — Hersi noted that DuPont has “underperformed” other materials makers over the past five years, and he doesn’t expect the stock will outperform in the near future.

But the spin-offs, which include some of DuPont’s fastest-growing businesses, could reward investors by gaining value faster than DuPont’s construction, fire-safety, medical-packaging, and other businesses, and longtime products such as Tyvek insulation..

DuPont expects sales to top $12 billion this year. The company was founded by French immigrants in 1802 and reorganized as the nation’s largest explosives maker in 1902 before its leaders took over General Motors Corp. and later launched nylon, Tyvek, Teflon, and other popular materials. It has a long history of buying, selling, and spinning off entire business lines, from oil producers to opioid painkillers.

Under Breen’s watch, DuPont merged its food and drug additives businesses with IFF (International Flavors and Fragrances) in 2021 and sold its industrial nylon, polyester, and elastomers to Celanese Corp. in 2022. The company bought electronics materials maker Laird Performance Materials, which makes plastics for autonomous vehicles, internet, and artificial intelligence applications, in 2021; Spectrum Plastics Group, which makes drug packaging materials, last year; and Donatelle Plastics Inc., which makes plastics for medical devices, last weekend.

Breen is no stranger to spin-offs: He also did a pair of three-way breakups at his previous company, the former Tyco Electronics, in the 2000s. Most of those businesses were acquired by other companies. Only Berwyn-based TE Connectivity, which makes electronic connectors and sensors, with plants in central Pennsylvania, South China, and other countries, remains an independent, publicly traded company.

But Breen told investors in the quarterly conference call that DuPont is planning to “stand up” both the electronics and the water businesses as independent companies. When analyst David Begleiter of Deutsche Numis asked whether PFAS and other DuPont environmental liabilities might scare off potential buyers of the water business, Koch said the company hasn’t talked to potential buyers. “Our intention is to spin” both businesses into independent companies, she said.

DuPont faces “only a few key competitors in electronics and water,” Breen added.

DuPont has “done a good job cleaning up” long-running environmental claims, settling litigation and capping expenses, John McNulty, analyst at BMO Capital Markets, told Breen during the conference call.

Breen says DuPont still faces a few thousand claims from firefighters who say they were exposed to health risks from foam using chemicals made by DuPont, but the company calculates that it has only a few percent of the liability it shares with many other companies, including its Wilmington-based Chemours spin-off, as well as companies that marketed and transported the hazardous materials.