(Reuters) - Pesticide and insecticide maker Corteva Inc’s (CTVA.N) quarterly profit beat estimates as volumes and prices in its international markets rose more than expected, sending its shares up more than 8%.
Investors cheered Corteva’s upbeat numbers, its first after separation from DowDupont in June, as they were a rare bright spot among agricultural companies that have been hard hit as floods ravaged huge swathes of western Corn Belt states.
The devastation pushed down total planted acres and demand for crop protection products like herbicides and pesticides.
Chief Executive James Collins, on a post-earnings call with analysts, said the unprecedented market backdrop for the second quarter presented considerable challenges to Corteva’s customers and in turn, to the company.
“Flooding, planting delays, prevented planting, delayed deliveries, insect pressures, trade-related market disruptions, the list is long and exceptional when viewed from the lens of history,” he added.
The weather woes are heaping more pain on the battered U.S. agricultural sector already hard hit by the prolonged U.S.-China trade tiff. The tariffs China imposed on soybean exports from the United States in retaliation for U.S. duties on Chinese goods curbed shipments of the most valuable U.S. export crop.
Net sales grew 10% from markets outside of North America, with Latin America rising 34%. Volumes from markets abroad rose 14%, while prices were up 3%.
On the other hand, sales in its home market fell 8 percent, with volumes down 5% and prices down 3%.
The former agricultural unit of chemicals giant DowDuPont, however, cut its 2019 core earnings expectation to between $1.9 billion and $2.05 billion from a prior forecast of $2.20 billion and $2.30 billion.
The company now expects net sales to be down about 3%, compared with its earlier forecast for sales to be flat.
Net sales in the current quarter fell 3.1% to $5.56 billion, but came in slightly above estimates of $5.52 billion.
Net profit from continuing operations attributable to Corteva fell to $470 million, or 63 cents per share, from $963 million, or $1.29 per share, a year earlier.
Excluding items, it earned $1.42 per share compared with analysts estimates of $1, according to Refinitiv IBES data.
Shares of the company were up 8.4% at $31.99 in late morning trading.
Reporting by Nishara Karuvalli Pathikkal and Arathy S Nair in Bangalore; Editing by Arun Koyyur and Shailesh Kuber