Chemicals giant DuPont de Nemours (DD 0.29%) is seeing demand soften, both from Western industrial customers and from China. That's impacting earnings, and investors are not happy.

Shares of DuPont traded down 12% as of 10:30 a.m. ET Wednesday after the company released preliminary year-end results.

Are DuPont customers scaling back?

DuPont isn't scheduled to release final fourth-quarter numbers until Feb. 6. But on Wednesday, the company said it expects to earn between $0.85 and $0.87 per share in the quarter on revenue of $2.9 billion, compared to analyst expectations for $0.85 per share on revenue of $3 billion.

For the first quarter of 2024, the chemical and specialty materials manufacturer said it expects net sales of $2.8 billion and adjusted earnings per share of $0.63 to $0.65 per share, well below expectations for $0.88 per share in earnings on $3 billion in revenue.

"As we finished 2023, we saw additional channel inventory destocking within our industrial businesses as well as continued weak demand in China," CEO Ed Breen said in a statement. "We are seeing similar trends continue and expect sequential sales and earnings to decline in the first quarter of 2024, driven by these factors and the absence of certain discrete items which benefited fourth quarter operating EBITDA."

The company's semiconductor business appears to be stabilizing, according to Breen, but questions remain about other end markets.

Is DuPont a buy after its earnings warning?

There is only so much a company can do when demand and volumes are weak. "We remain focused on the operational levers within our control," Breen said, but over the long run Wall Street rewards growth, and not cost-cutting.

DuPont sees conditions stabilizing as the year continues and is forecasting a return to year-over-year sales and earnings growth by the second half of 2024. With the stock now down more than 16% from where it started the year, this could turn out to be a buying opportunity if that forecast proves to be accurate.

But a lot of macro uncertainty remains, and it is hard to know right now whether demand will firm, or further soften, in the quarters to come. Investors interested in buying in today need to be aware of the cyclical nature of this industry and understand things could get worse before they get better.