UPDATE 2-Corteva profit beats on higher seed prices; plans $1 bln share buyback
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Jan 31 (Reuters) - Agricultural chemical and seed company Corteva beat Wall Street estimates for fourth-quarter profit on Wednesday as higher prices in its seeds business offset lower volumes and announced plans to repurchase nearly $1 billion shares in 2024.
The Indianapolis-based company also forecast higher net sales in 2024, falling in the range of $17.4 billion to $17.7 billion, banking on demand for grain, oilseeds and biofuels.
Though global crop prices have fallen from last year, they remained elevated compared to historical averages, leading to farmers harvesting more to cash in on elevated crop prices.
Corteva, spun off in 2019 after a merger of Dow Chemical and Dupont, reported net sales of $17.23 billion in 2023, staying in the $17-$17.3 billion range that the company had forecasted.
Net sales were at $3.71 billion for the quarter ended Dec. 31, compared with estimates of $3.62 billion, as per LSEG data.
Sales from seed business were $1.64 billion, down 0.6% due to lower volumes, with farmers delaying purchases due to unfavorable weather in Brazil.
However, this was offset by higher seed prices led by North American and European markets, and increased corn acres in North America.
For the crop protection segment, Corteva's reported net sales were nearly 5% lower on both falling volumes and prices especially in Latin America, and channel inventory destocking.
Brazil's drought caused farmers to delay fertilizer purchases for their corn-planting season, denting sales for global fertilizer suppliers including Corteva, which had to sell its Brazilian stock at a discount due to tepid demand.
In 2024, crop markets may face tighter supplies due to adverse El Nino-related weather effects, export restrictions and higher biofuel mandates, analysts said.
Shares of Corteva were down 0.8% after the market closed.
The operating core profit was 15 cents per share, compared with average analysts' estimate of 6 cents.
(Reporting by Seher Dareen in Bengaluru; Editing by Arun Koyyur and Rashmi Aich)
