Corteva Agriscience announced plans to buy back stock and cut overhead costs.
The Indiana-based company announced that its board signed off on a new $2 billion share repurchase program. The program gives management discretion in determining the conditions under which shares may be purchased.
This newly authorized program is in addition to the Company’s existing $1.5 billion program announced in August 2021, which had $650 million remaining as of June 30.
“This action underscores our Board’s confidence in Corteva’s future and our commitment to continue to return capital to shareholders,” said Chuck Magro, Corteva CEO. “Corteva’s new share repurchase program, together with the company’s recent dividend increase, demonstrate Corteva’s firm financial foundation, positive performance outlook and commitment to capital allocation discipline. Our strategy continues to balance investing for growth with returning capital to shareholders.”
The announcement on Tuesday led to a nearly 3% percent gain in Corteva shares after a terrible day on Wall Street, with the Dow average down 1,300 points. The stock slide followed a worse-than-expected report on inflation.
Reuters and other outlets reported that the company will trim overhead costs and reduce its worldwide footprint to its largest agribusiness markets
The stock performance of companies involved in the DowDuPont merger and spinoff has not been lived up to predictions that were made when the complex transaction took place. The result has been continued restructuring moves and stock buybacks.
Corteva was touted as the crown jewel of the deal, combining the ag businesses of DuPont and Dow. DuPont has continued to slim down as a materials company increasingly focused on the electronics industry, with Dow emerging in its former role as a massive commodity chemical company.
Earlier, Corteva’s CEO, a veteran DuPonter, retired. Earlier, an activist shareholder group had called for his ouster. He was replaced by Magro, a former executive of a Canada-based fertilizer company.
As part of the spinoff, Corteva was saddled with DuPont’s pension obligations, with executives at the time of the spin off citing the growth potential of the company that focuses on seeds and crop protection. The company’s financial performance is of more than passing interest to thousands of DuPont retirees in Delaware and other areas.
Cited as one reason for the most recent announcement were inflationary pressures.
The Dow-DuPont spin-off’s headquarters was earlier moved to Indianapolis from just outside Wilmington. The bulk of the company’s U.S. operations is in the Midwest.
A company spokesperson said Corteva will maintain a corporate presence in Delaware.
