By Ruhi Soni
(Reuters) -Agricultural chemical and seed company Corteva Inc on Thursday posted a smaller-than-expected third-quarter adjusted loss as farmers looked to maximize yields at a time of low global grain supplies.
Operating loss was 12 cents per share in the July-September quarter, from 14 cents per share a year earlier. Analysts on average had expected a loss of 23 cents per share.
Prices of essential crops soared this year and stoked food inflation after exports from Ukraine, the “breadbasket of the Black Sea”, have been blocked since its invasion by Russia.
Corteva had in August raised its 2022 sales and earnings forecasts.
The company “expects record demand for grain and oilseeds in 2022” to support continued high prices, it said on Thursday.
On a GAAP basis, however, it swung to an after-tax net loss of $322 million in the reported quarter from a year-ago profit of $36 million, hurt in part by higher input and freight costs in its seeds business.
Corteva’s global competitors like Bayer AG, BASF and Syngenta have recently signaled hurdles such as supply chain shortages, ballooning European energy costs and a stronger U.S. dollar.
“While the outlook for ag fundamentals is strong, macroeconomic pressures are expected to continue, including currency and inflation headwinds,” Corteva Chief Executive Officer Chuck Magro said in a statement.
The Indianapolis-based firm laid out cost-cutting plans in September. During the quarter, it divested smaller businesses including “straight-goods” glyphosate and Lannate insecticides.
Third-quarter net sales rose 17% to $2.78 billion, also beating Wall Street expectations of $2.60 billion.
Operating loss in its seeds unit was $224 million in the reported quarter from last year’s loss of $217 million.
Operating earnings in its crop protection business, which sells chemicals like fungicides, herbicides, and insecticides, jumped 71% to $352 million.
Shares gained 1.4% in extended trading.
(Reporting by Ruhi Soni in Bengaluru; Editing by Anil D’Silva)