February 4, 2021

Corteva projects 2021 profit above analysts' estimates thanks to strong demand for corn and soybean

Corteva Inc projected 2021 core earnings above estimates from analysts as strong demand for corn and soybean crops boosted prices for the commodities, in turn increasing demand for the company's seed and pesticide products, Reuters reported.

Corteva also posted a fourth-quarter profit, and expects more acres to be planted in North America this year as farm incomes rise thanks to multi-year high prices for corn and soybeans.

The company forecast 2021 operating earnings (before interest, tax, depreciation and amortization, EBITDA) of US$2.4 billion to US$2.5 billion. This is higher than the US$2.35 billion projected by analysts, based on Refinitiv IBES data.

But the company's net sales projection of US$14.5 billion is lower than the expected US$14.67 as Corteva expects a US$300 million hit following its exit from several low-margin crop protection productions.

The company said it will lay off workers and retire assets to reduce costs, resulting in a US$130 million to US$170 million expected charge.

Corteva posted 8% higher net sales in the fourth quarter on strong demand for its Corteva's Enlist and Arylex herbicides and Isoclast insecticide, plus increased prices for its crop-protection products in Latin America.

Corteva's crop-protection products saw its sales increase by 13%, but seed sales were flat as higher volumes were offset by a weaker Brazilian Real.

The company is based in Wilmington, Delaware, United States.

- Reuters