July 23, 2014

DuPont expects continued weak farm sales in Q3

DuPont, the world's second-largest seed maker, said its agriculture business would not improve in the current quarter as it struggles to cope with farmers' preference for soybean rather than corn, which makes up about half of Dupont's farm business.

Farmers in North America have switched to soybean from corn in the spring planting season, after delaying purchases earlier this year due to an unusually harsh winter. Soybean made up 14% of DuPont's 2013 farm sales. The low demand for corn seeds, which accounted for about half of DuPont's farm sales in 2013, led to weaker-than-expected revenue in the company's second quarter ended June 30.

DuPont now gets more than a third of its sales from the farm business. The company's second-quarter operating earnings in the agriculture unit fell 11% to $836 million. DuPont said it expects a third-quarter loss "similar" to the $62 million it reported a year earlier in the farm business.

The July-to-September quarter is seasonally weak for seed makers as it is harvesting season in the northern hemisphere and spring planting in the southern hemisphere is yet to begin.

DuPont's forecast for the second half of the year implies a company-wide operating profit of 50-54 cents per share in the third quarter, lower than the 60 cents analysts on average are expecting.