DuPont agriculture segment sales down 11% in Q2 2015

Sales of DuPont’s agriculture segment, including crop protection and seed business, decreased by 11% to $ 3,218 million in the second quarter ended June 30th, 2015, as higher local prices were offset by 6 % lower volumes and a 5 percent negative impact from currency. Seed sales were 7 % lower and crop protection sales were down 21 % versus last year. Volume for the segment declined 6 % due to lower soybean seed sales, lower crop protection volumes due to weaker market demand and reduced global corn planted area.

Second quarter operating earnings decreased by 7 % as productivity, continued discipline in spending and pricing gains were more than offset by about $84 million negative currency impact and from lower volumes. Excluding the impact of currency, operating earnings would have grown about 3 %. Operating margins increased about 110 basis points in the quarter.

For the first half year of 2015, sales recorded a decrease of 10.7% to $ 7,155 million, while Operating earnings dropped by 14.9% to $ 3,578 million.



Outlook

For the third quarter the company expects sales to be down mid-teens percent as local pricing gains from new products are expected to be more than offset by very strong currency headwinds, lower corn volumes and continued pressure on crop protection inputs. The company expect a seasonal operating loss in the third quarter of about $225 million as productivity and cost actions are more than offset by currency and lower volumes. Fourth quarter operating earnings are expected to be similar to last year.

Looking at the full year, the company is reducing expectations for its Agriculture segment due to weaker demand in global crop protection markets, reduced expectations for corn area in Latin America, and lower than expected soybean volumes in North America. DuPont expects Agriculture segment sales to be high-single digits percent lower with operating earnings in the low-twenty percent range below 2014 as local pricing gains, productivity and disciplined cost management are offset by currency and lower volumes. Currency remains the primary factor in the decline in 2015 results. Excluding the impact of weaker global currencies they expect operating earnings for the year would be down low-single digits percent.