Last month Corteva hinted at a possible hit in demand for grains and oilseeds due to delays in planting soybean in China, Brazil, and other emerging producers, causing an 8% drop in its stocks.
Dry weather has been persistent in most growing regions of Brazil pushing out planting of soybeans as well as the usage of crop protection products. Brazil is the world’s top producer and exporter of the oilseed, relying on China as its biggest market for the produce. However, the Chinese market hasn’t been stable due to the ongoing months-long trade war between Washington and Beijing.
“Coupled with production disruptions and delays, recent softening in the Chinese economy, African swine fever and slower growth in other emerging markets are impacting the demand outlook for commodity grains and oilseeds,” chief executive officer James Collins said on a post-earnings call.
Corteva is a renowned American agricultural chemical and seed company that was the agricultural unit of DowDuPont prior to being spun off as an independent public company.
CEO Collins’s comment came after the firm reported a smaller-than-expected loss occasioned by the higher US seed sales following historic floods in the U.S. Midwest that caused a delay in the spring planting season.
The company also confirmed that it would not be able to attain its projected profit of US$1.9 billion to $2.05 billion mainly because of weaker Brazilian Real.
Corteva, previously DowDuPont’s agricultural unit, also reported that it had tightened its operating earnings per share forecast from an initial $1.06 to $1.31 estimate to between $1.20 and $1.26.
In the third quarter ended September, Corteva’s attributable Net Loss fell 66% per share to $494 million from the previous year’s quarter three $6.83 per share or $5.12 billion. The company incurred a $4.5 billion goodwill impairment charge in 2018, ending up reporting billions in Net Loss.
According to Refinitiv IBES, without items, the company posted a loss amounting to 39 cents per share, down from the analysts’ estimate of 46 cents.
The company also reported a 2% drop in its net sales to $1.91 billion, largely due to a weaker euro and Brazilian Real, even as organic sales remained flat. The revenue came 4.5% short of analysts’ $2 billion prediction.
In general, volumes rose 3% while local prices fell 3% in quarter three.
Corteva is said to be preparing the ground for a $145-million investment in its Michigan plant to boost its overall production capacity.