Corteva Agriscience expected to report Q1 sales decline

DowDuPont’s Agriculture business (Corteva Agriscience) is expected to report first quarter results that are lower than its updated guidance, due to the longer than expected impact of severe weather-related conditions.

On March 28, the Agriculture Division reported on the effects of March flooding in the Midwestern U.S. , which created transportation disruptions that halted farming operations and severely delayed seed deliveries into the early part of April. Less than 50% of planned seed deliveries in the last 5 days of the quarter occurred, resulting in a greater than anticipated impact on first quarter performance. In this peak delivery period, under normal circumstances and based on history, the division would expect one day of U.S. seed sales to generate about ~$25 to $35 million in operating EBITDA.
 

The division expects to record net sales of $3.4 billion and operating EBITDA of about $665 million, down 11 and 25 percent versus the same quarter last year, respectively. For the first half of 2019, the division anticipates net sales to be down low-single digits percent and operating EBITDA to be 3 to 5 percent below the same period last year. Deliveries are on track with current expectations and the revised first half guidance reflects the possibility of reduced planted acres overall, lower than anticipated corn acres, and continued delays to the start of the planting season due to additional weather events.
 

The division confirms full year guidance of organic sales up low-single digits percent and operating EBITDA of about $2.8 billion. The division expects to overcome the first half decline through realization of price and volume opportunities on high demand products and new product launches and accelerated cost synergy delivery, resulting in an improvement in second half performance versus prior year.
 

DowDuPont will release its full financial results for the first quarter of 2019 on May 2 .