02:32 AM | January 31, 2020 | Rebecca Coons
Corteva reports a net loss of $18 million for its seasonally weak fourth quarter, compared with a net loss of $914 million in the year-ago quarter. An adjusted loss of 6 cts/share was up from a net loss of a dollar in the year-ago quarter and beat analysts’ consensus estimate for a loss of 12 cts/share. Net sales increased 6.0% year on year (YOY), to $3.0 billion. Volumes increased 6% YOY, driven primarily by stronger seed sales in North America, penetration of Enlist herbicides ahead of the 2020 planting season, and sales of new products in Latin America and EMEA.
“As we look forward, we expect more normal weather conditions in North America will set the stage for further performance improvements,” says James C. Collins, Jr., Corteva CEO. “We remain committed to driving shareholder value and financial results consistent with our stated priorities.”
Crop protection sales increased 3.0% YOY, to $1.7 billion, on an 8% increase in volume. Crop protection operating EBITDA was $277 million, up from $169 million in the year-ago quarter. Cost synergies, gains on divestitures, and volume gains more than offset increased selling costs.
Seed sales increased 10.4% YOY, to $1.2 billion, on an 8% increase in local price and 5% increase in volume. Seed operating EBITDA was a seasonal loss of $26 million, up from a loss of $87 million in the year-ago quarter. “Pricing gains on favorable mix and cost synergies and ongoing productivity were partially offset by higher input costs driven by higher royalties and lower production yields,” Corteva says.
Corteva is forecasting adjusted earnings of $1.45–1.55 per share.
The company also announced that it is accelerating ramp-up of its Enlist E3 soybeans to US and Canadian farmers over the next five years. The company expects planted acreages in 2020 to approach 20% of the US market–double original expectations. The triple-stack incorporates glyphosate and glufosinate and enables use of Corteva’s new 2,4-D formulations in Enlist One and Enlist Duo herbicides with lower volatility and minimized potential for physical drift. During the five-year ramp-up period, Corteva is expected to significantly reduce the volume of products with the Roundup Ready 2 Yield and Roundup Ready 2 Xtend herbicide tolerance traits, beginning in 2021, with expected minimal use of the trait platform after the completion of the ramp-up of the Enlist weed control system.