August 9, 2020

Corteva's revenue falls below forecast

Corteva Inc's second-quarter revenue and its reinstated full-year fprecast came in below expectations, which sent their shares down as much as 9% in extended trade, Reuters reported.

Good weather and higher planted area shifted corn volumes in North America to the first quarter, while the pesticides business was pressured by a strong performance last year when the Latin America season started earlier, the company said.

The seed and pesticide producer, which had suspended its 2020 forecast in May due to uncertainty from the COVID-19 crisis, said it now expects earnings per share between US$1.25 and US$1.45 for the year, below analysts' estimates of US$1.40 at its midpoint.

It estimated sales to rise 1% to 2%, which translates to a range of between US$13.98 billion and US$14.12 billion, also lower than analysts' estimates of US$14.20 billion.

Wednesday's outlook was also slightly below Corteva's original estimates for earnings between US$1.45 and US$1.55 per share on sales of about US$14.5 billion, reflecting a weaker Brazilian Real and lower corn demand.

Corteva said demand and prices for corn have not yet seen a complete rebound. A third of all US corn produced is used to make ethanol, which has taken a hit as pandemic-driven travel restrictions hurt demand for gasoline into which the biofuel is blended.

The Wilmington, Delaware-based company earned US$1.26 per share for the three months ended June 30, beating analysts' estimates of US$1.24, in part due to cost cuts.

The company, spun off from chemical conglomerate DowDuPont, said net sales fell 6.6% to US$5.19 billion, missing estimates of US$5.47 billion, according to Refinitiv IBES data.