2023-08-04 15:36:53 ET
Corteva ( NYSE: CTVA ) +1.1% in Friday's trading despite cutting full-year guidance, with analysts saying the weaker outlook is "better than feared."
Q2 adjusted earnings came in better than expected at $1.60/share compared with the $1.58/share analyst consensus estimate, but net sales fell 3% Y/Y to $6.05B, below expectations; the company's seed business rose 8% Y/Y to $4.26B off a 14% rise in prices, while crop chemical sales fell 23%.
But citing delayed farmer purchases this year and an industry-wide destocking of farm products, Corteva ( CTVA ) cut full-year guidance for sales to $17.9B-$18.2B from its prior outlook for $18.6B-$18.9B previously, operating earnings to $2.75-$2.90/share from $2.80-$3.00/share previously, and adjusted EBITDA to $3.5B-$3.65 from $3.55B-$3.75B.
At least two analysts - Wells Fargo's Richard Garchitorena and Oppenheimer's Kristen Owen - called the downward revisions "better than feared."
Corteva ( CTVA ) said higher interest rates and improved product available after supply chain issues a year ago has led to a pullback in buying, and farmers have switched to more just-in-time buying for their pesticides.
Agriculture peer FMC Corp. ( FMC ), which had cut its full-year outlook in July , said this week it expects the global crop protection market will decline by high single to low double digits during the year.
More on Corteva:
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- Analysis: Corteva: Solid Quarter To Start The Year
- Stock price return: Down 5.5% YTD, up 1% in the past 12 months
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Corteva cuts full-year sales forecasts but analysts say 'better than feared'