Corteva Lowers 2024 Forecasts Due to Pricing Pressures in Crop Protection, Reports Reuters

Corteva has revised its annual sales and operating earnings forecasts downward as it grapples with falling prices in its crop protection division, resulting in a 5.7% decline in its shares during after-hours trading.

This adjustment comes as a decrease in crop prices has led farmers to reduce their spending, negatively impacting the demand for pesticides and insecticides. The company noted, “While the global crop protection industry volume has begun to stabilize, pricing pressures have intensified due to increased competition and tighter margins for farmers.”

Corteva now projects operating earnings between $2.60 and $2.80 per share, down from a previous forecast of $2.70 to $2.90. Analysts had expected operating earnings of $2.77 per share on average.

The agrichemicals producer anticipates net sales in the range of $17.2 billion to $17.5 billion, slightly lower than its earlier projection of $17.4 billion to $17.7 billion. In its second quarter, Corteva saw crop protection sales remain flat compared to the previous year, as an increase in volume was offset by a 5% decline in prices.

Demand for crop protection products has been weak in South America, particularly due to flooding in Brazil, a major grain producer, which has impacted market conditions.

Total net sales rose 1% to $6.11 billion, supported by a 2% increase in the seed segment. North America experienced a 5% rise in seed prices, benefiting from favorable weather conditions that are expected to bolster corn and soybean production this year.

Originally part of DowDuPont, Corteva reported an operating income of $1.83 per share for the quarter ending June 30, surpassing the anticipated $1.73 per share.