Corteva, Inc. reported financial results on Oct. 31, 2019, for the quarter ended Sept. 30, 2019, and provided guidance for the full year.

For the quarter, net sales declined 2% versus the same period last year, with flat organic sales. Favorable impacts from shifts of soybean and corn sales into the third quarter, driven by delayed planting in North America, were more than offset by shifts of Crop Protection sales in Latin America.

Volumes increased 3% versus the same period last year, as delayed North America planting shifted second quarter sales into the third quarter. This volume growth was partially offset by declines in Latin America, where early demand for Crop Protection products shifted sales into the second quarter and delays in the Brazil soybean season shifted Crop Protection sales into the fourth quarter. Currency represented a headwind of 2%, primarily due to the Brazilian Real and Euro.

GAAP loss from continuing operations after income taxes was $527 million in the quarter. Operating EBITDA was a loss of $207 million, an improvement of 18% as compared to the same period last year on a pro forma basis. Improvement in Seed operating EBITDA due to timing shifts in North America and cost savings from synergies was partially offset by lower Crop Protection operating EBITDA, due to timing of sales in Latin America.

The Company reported a loss $0.69 for GAAP EPS from continuing operations and a loss of $0.39 for operating EPS for the third quarter 2019.

Crop Protection net sales were $1.2 billion in the third quarter, down from $1.4 billion in the same quarter last year. The decrease was due to a 9% decline in volume, a 2% decline in local price, and a 1% decline from currency,

The volume decline was driven by early demand for Spinosyns insecticides and seed applied technologies in Latin America, where approximately $80 million of sales shifted into the second quarter and a delayed soybean season in Brazil shifted sales into the fourth quarter. These shifts more than offset the approximate $65 million improvement in new product sales, driven by EMEA, versus the same quarter last year. The decrease in local price was driven by grower incentive discounts in North America. Unfavorable currency impacts were primarily due to the Brazilian Real and Euro.

Crop Protection operating EBITDA was $119 million, down 25% from the same period last year. Volume declines in Latin America, grower incentive discounts in North America, and currency more than offset cost synergies, sales from new products, and ongoing productivity.

Seed

Seed net sales were $681 million in the third quarter, up from $551 million in the same quarter last year. The increase was due to a 31% increase in volume, partially offset by a 5% decline in local price and a 2% decline from currency.

Strong volume growth was driven by significant weather-related planting delays in North America in the first half of the year, which shifted soybean and corn seed sales into the third quarter. The decline in local price resulted from competitive pricing pressure in soybeans in the U.S. and increased soybean and corn replant in North America, which was partially offset by mix improvement in Latin America. Unfavorable currency impacts were primarily due to the Brazilian Real.

Seed operating EBITDA was a loss of $295 million, compared to a loss of $372 million in the same period last year. Volume gains from delayed seed sales in North America, cost synergies, and ongoing productivity more than offset decreases in local price and the unfavorable impact of currency.

Outlook

The company affirmed 2019 guidance for net sales and expects operating EBITDA at approximately $1.9 billion, which is the lower end of the previously communicated range of $1.9 billion to $2.05 billion. Corteva now expects to deliver at the lower end of the previously communicated range largely due to further negative impact of currency. The company revised its full-year operating EPS range, now expected to be between $1.20 and $1.26 per share. Using the mid-point, this represents a $0.04 improvement over the mid-point of the prior guidance.

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