Corteva, the combined agriscience businesses of Dow and DuPont, beat earnings estimates, with GAPP (Generally Accepted Accounting Principles) income of $1 billion for the first half of 2020.
Earnings modestly topped estimates from Zacks. Shares of Corteva dropped by about one-half of one percent in trading on Wednesday.
Corteva is based near Wilmington but has international operations and a major presence in the Midwest.
Earnings of Corteva are closely watched in Delaware, despite the company’s modest corporate presence in the First State. Corteva ended up with the management of DuPont’s $23 billion pension system.
Corteva’s operating EBITDA (earnings before interest, taxes, depreciation, and amortization) was $2 billion, up 3 percent from the prior year thanks to price and volume gains in seeds, despite difficulties in currency and crop protection.
Cost-cutting and productivity gains amounted to about $130 million for the first half.
Highlights:
- Reported net sales for first half of 2020 were $9.1 billion, up 2 percent versus prior year, driven by volume and price improvement. Organic sales1 grew 5 percent, with growth in each region.
- Seed sales rose 6 percent on a reported basis and 8% on an organic basis, with volume and price growth in every region – particularly in corn and soybeans in North America.
- Crop Protection sales declined four percent on a reported basis – and were up 1 percent as sales gains in Europe, the Middle East and Africa, and Asia Pacific were affected by declines in Latin America and North America..
CEO James Collins, offered the following comments:
“Our results in the first half of 2020 highlight the strength of our global execution engine and our operational resilience in the face of historic market volatility. In the first half, we experienced sharp swings in commodity prices and foreign currency rates due to COVID-19, renewed trade and regulatory uncertainty, and new regulatory challenges. Amidst these external pressures, we delivered sales and earnings growth. We demonstrated strong price execution in Seed, supply chain flexibility, and solid market demand for our balanced and differentiated new product portfolios in both segments. Our results were strengthened by diligent efforts to further drive down costs, mitigate currency headwinds, and preserve cash. Further, our balance sheet and liquidity position remain strong, supported by targeted actions taken in the quarter. I am especially proud of our teams around the world, executing with focus and integrity in a rapidly evolving landscape, to ensure continued support for our customers and communities.”
Collins concluded: “Looking ahead, we will increase value for stakeholders through continued progress on our strategic objectives – positioning ourselves well to continue growing our presence in key channels and markets. Our priorities in the second half of 2020 include accelerating productivity actions and supporting the launch of key innovations, such as our Enlist weed control system, that will enable our customers to drive their profitability.”
