Antonella Franzen
Chief Financial Officer at DuPont de Nemours
Thanks Ed, and good morning, everyone. We are very pleased that our third quarter results reflect sequential improvement across all key financial metrics and a return to organic sales growth at the consolidated level. Both earnings and cash flow benefited from volume recovery and improved production rates at key operating sites, and our team has executed well on productivity and cost actions announced last year.
Turning to Slide 5, I will cover our third quarter financial highlights in further detail. Net sales of $3.2 billion increased 4% versus the year ago period on organic sales growth of 3% and favorable portfolio impact of 2% reflecting contributions from both the Spectrum and Donatelle acquisitions. These increases were partially offset by a 1% currency headwind. The organic sales growth of 3% reflects a 5% increase in volume, partially offset by a 2% decrease in price.
Higher volume was driven by continued broad based growth in electronics end markets with semi and interconnect solutions volumes both up double digits coupled with the return to year-over-year volume growth in water solutions. On a segment view, E&I organic sales grew 10% and W&P's quarterly organic sales decline moderated further to 2%, on its way to an anticipated return to positive growth in the fourth quarter.
Organic sales in corporate declined 6% versus a year ago period driven by continued weakness in China solar markets, which led us to exit a photovoltaic film product line during the third quarter. This product line represents less than 1% of consolidated net sales. From a regional perspective, Asia Pacific delivered 9% organic sales growth versus a year ago period led by another strong quarter in China, where organic sales were up low double digits driven by electronics end markets. In other regions, organic sales in Europe were 1% while North America was down 2%.
Second quarter operating EBITDA of $857 million increased 11% versus the year ago period as volume gains along with improved flag utilization and savings from restructuring actions were partially offset by higher variable compensation and select growth investments. Operating EBITDA margin during the quarter increased to 26.8%, up 150 basis points versus the year ago period, and up 160 basis points on a sequential basis. Third quarter reflected another period of strong cash generation and conversion, reflecting both improved volumes as well as strong working capital discipline across each business line.
On a continuing operations basis, cash flow from operations of $737 million, less capital expenditures of $109 million and $12 million of separation related transaction cost payments resulted in transaction adjusted free cash flow of $640 million and related conversion of 130%.
Turning to Slide 6, adjusted EPS for the quarter of $1.18 per share increased 28% from $0.92 in the year ago period. Higher segment earnings of $0.14 as well as the benefit of a lower share count of $0.09 and lower tax rate of $0.06 were partially offset by higher depreciation of $0.03.
Our base tax rate for the quarter was 19.8%, down from 24.6% a year ago, driven by certain discrete tax benefits reported in the current period. We now estimate our full year 2024 base tax rate to be approximately 23.5%.
Turning to segment results beginning with E&I on slide 7. E&I third quarter sales of $1.6 billion increased 13% versus the year ago period, as organic sales growth of 10% and the Spectrum and Donatelle sales contribution of 4% were slightly offset by a 1% currency headwind. Organic sales growth of 10% reflects an 11% increase in volume, slightly offset by a 1% decrease in price. At the line of business level, organic sales per semi were up more than 20% for the second consecutive quarter, reflecting continued overall semi demand recovery driven by AI technology ramps and share gains in certain product lines. Semi demand was notably strong in China including continued customer pre buying similar to what we saw last quarter.
As we move forward, we expect China demand to normalize, but still remain strong. Overall semi fab utilization continues to improve averaging 76% during the quarter, though notably stronger for advanced node chips due in part to AI related demand acceleration.
Interconnect Solutions delivered another strong quarter as well with organic sales of low double digits reflecting continued broad-based electronics recovery, including a demand benefit from AI driven technology ramps. We saw content and share gains within high value electronic applications and a volume recovery within the overall printed circuit board space.
The year over year sales decline in industrial solutions continues to moderate, as organic sales were down slightly during the quarter, as strength in printing and packaging applications was offset by ongoing volume headwinds for Kalrez. Also, within Industrial Solutions, we completed the acquisition of Donatelle, a medical device manufacturer, at the end of August. We are very pleased with the integration of Donatelle into Spectrum, and are seeing the potential benefit to leverage Donatelle's technology and capabilities to other businesses as well as cross selling opportunities within our healthcare platform.
Operating EBITDA for E&I of $467 million was up 22% versus a year ago period, driven by volume growth, the impact of higher production rates, savings from restructuring actions as well as the earnings contribution from Spectrum and Donatelle. These gains offset by higher variable compensation and select growth investments related primarily to the ongoing transition to advanced nodes, and new and ramping AI applications across both semi and interconnect solutions. Operating EBITDA margin during the quarter was 30.1%, up 210 basis points versus the year ago period.
Turning to slide 8, W&P third quarter net sales of $1.4 billion declined 2% versus the year ago period, primarily due to price headwinds as overall segment volumes were flat. Within Safety solutions, organic sales were down mid single digits, largely on price decline along with lower volume driven mainly by Tyvek Medical Packaging. We did see a second consecutive quarter of sequential sales lift in medical packaging, with sales up 10% in Q3.
Shelter Solutions sales were down slightly on an organic basis, with headwinds in North American residential construction markets, mostly offset by growth in commercial construction. The third quarter includes a return to year-over-year sales growth for Water Solutions where organic sales were up low single digits. Higher volumes were driven by strength in ultrafiltration technologies along with continued volume recovery in China. On a sequential basis, Water solution sales also increased for a second consecutive quarter, with sales up 3% which was better than our expectation coming into the quarter.
Operating EBITDA for W&P during the quarter of $364 million was up 1% versus the year ago period as productivity and savings from restructuring actions more than offset the organic revenue decline and higher variable compensation. Operating EBITDA margin during the quarter was 26.3%, up 70 basis points from the year ago period. As we move into the 4th-quarter, we expect strong volume growth on a year-over-year basis.
Moving to our outlook on Slide 9, for the fourth quarter we expect net sales, operating EBITDA and adjusted EPS of about $3.07 billion, $790 million and $0.98 cents per share respectively. On a year-over-year basis, our fourth quarter guidance of strong sales and earnings growth from both E&I and W&P, translating to total company growth and net sales of about 6%, operating EBITDA of 10% and adjusted ETF of 13%.
Sequentially we assume normal seasonal declines in electronics and construction markets. Additionally, as I mentioned earlier, we expect to see a moderation of growth in China as pre-buying and semi plays out, as well as the impact of exiting the PV film product line. Partially offsetting these sequential declines is the continued recovery in Water and Medical Packaging end markets.
For the full year 2024, we are raising our earnings guidance above the high end of our prior range and now expect operating EBITDA of about $3.125 billion and adjusted EPS of $3.90 per share, which reflects 12% EPS growth year-over-year. With that, we are pleased to take your questions, and let me turn it back to the operator to open the Q&A.
