22:47 PM | May 6, 2020 | Rebecca Coons
Corteva reports first-quarter net income of $282 million, 60.2% higher year-on-year (YOY) on significantly higher volume in seeds and crop protection. Operating earnings per share of $0.59 was 79% higher YOY and beat the analysts’ consensus estimate of $0.40/share. Net sales increased 16.5% YOY, to $3.9 billion, with double-digit organic sales growth in every region.
“Our global diversity, collaborative approach, and dedicated team produced solid financial and operating results in the quarter, despite a difficult environment—and while more uncertainty lies ahead, we are committed to working transparently with our stakeholders as we navigate this historic time for our industry and our world,” says James C. Collins, Jr., Corteva CEO.
Crop protection sales increased 5% YOY, to $1.5 billion, on increased demand for new products, including Arylex and Enlist herbicides. Segment operating EBITDA increased 8.2% YOY, to $238 million, on a pro forma basis. Gains from new product sales and cost synergies were partially offset by higher input costs, unfavorable currency and portfolio impacts. Segment operating EBITDA margin increased 50 basis points versus the prior-year period.
Seed sales increased 25% YOY, to $2.5 billion, due to higher corn deliveries in North America and strong sunflower and corn sales in Europe. Volume gains primarily resulted from earlier deliveries in North America due to improved weather conditions and the anticipated recovery of planted area, as well as strong early demand in EMEA due to perceived supply concerns from coronavirus diseases 2019 (COVID-19) pandemic. Segment operating EBITDA increased 78.7% YOY, to $581 million. Volume gains in North America, favorable mix, and cost synergies and ongoing productivity improvements more than offset higher commissions, currency headwinds, and higher unit costs due to unfavorable seed yields.
The company suspended 2020 guidance because of the COVID-19 crisis and the uncertainty it is creating across global markets.