-Corteva Inc on Wednesday forecast 2022 sales above market expectations as the insecticide and seed maker benefited from strong demand and higher prices.
U.S. farmers are pre-buying seeds and chemicals in a bid to secure supplies for next spring, amid rising prices due to labor issues, tightened global supplies of fertilizers and chemicals and surging demand.
Sales of the company’s crop-protection products rose 6% in the quarter led by its herbicides, Enlist and Arylex, and Isoclast insecticide, while strong demand for corn in Latin America and higher volumes boosted its seed segment sales by 12%.
“Global agriculture fundamentals remain strong going into 2022, and we expect demand across the industry to remain resilient despite other macro challenges,” chief executive Chuck Magro said.
The company, spun off in 2019 after a merger of Dow Chemical and Dupont, said it expected net sales of $16.7 billion to $17 billion for the year 2022, above estimates of $16.62 billion.
Corteva forecast operating earnings before interest, tax, depreciation and amortization (EBITDA) of $2.8 billion to $3 billion. Analysts expected the company to post core earnings of $2.98 billion, according to Refinitiv IBES.
Corteva’s shares were down as much as 5.46% at $45.5 in extended trading.
The Wilmington, Delaware-based company’s net sales rose 8.48% to $3.48 billion in the fourth quarter, which were slightly above market estimates of $3.46 billion, according to Refinitiv.
The company’s operating earnings before interest tax, depreciation and amortization for the fourth quarter stood at $262 million, or 8 cents per share, missing analysts’ estimate of 9 cents
Corteva named ex-Nutrien head Chuck Magro as its chief executive officer in November, after its previous CEO retired amid activist investor Starboard Value’s push to oust him.
(Reporting by Rithika Krishna in Bengaluru; Editing by Krishna Chandra Eluri)
