Corteva (CTVA) Stock Slips After Hours as Brazil Weakness Hits Earnings

TLDR

• Corteva (CTVA) stock fell about 6% after hours to $11.34 following its Q3 report.
• Adjusted EPS was $0.06 versus $0.10 expected, and revenue fell 9% to $1.59 billion.
• Latin America organic sales dropped 31% as Brazil’s crop protection market weakened.
• Full-year adjusted operating EPS guidance of $0.76 to $0.80 beat the $0.60 consensus.
• The quarterly filing was delayed because of spinoff work.

Corteva (CTVA) stock slipped about 6% in after-hours trading Wednesday, landing at $11.34. The drop followed a third-quarter report that missed on profit and sales.

Corteva, Inc., CTVA

The stock had closed the regular session at $12.14, down 0.25%. Then the numbers came out.

Adjusted earnings per share came in at $0.06. Analysts had expected $0.10.

Revenue fell 9% from a year ago to $1.59 billion. Wall Street was looking for $1.77 billion.

On a pro forma basis, Corteva swung to a loss of $56 million, or 8 cents a share. A year earlier, it earned $58 million, or 9 cents a share.

Brazil Takes the Blame

Corteva pointed to Brazil as the main drag. Farmers there are short on cash and face high financing costs.

Buyers are also ordering just in time, and pricing pressure has grown. Competition on older molecules added to the squeeze.

Latin America organic sales fell 31%, with volume down 24%. Elevated channel inventory and delayed purchasing played a part.

CEO Luke Kissam said the company executed well on what it could control. He added that Brazil was “materially weaker than anticipated.”

Company-wide, volume slipped 2% while pricing dropped 7%. U.S. acetochlor, a herbicide, also faced price headwinds, though Kissam said those matched expectations.

Bright Spots and Guidance

North America organic sales rose 7%, helped by 19% volume growth from new products. EMEA organic sales grew 14%.

Adjusted operating EBITDA for the quarter was $222 million, down 17% from last year. That trailed the pace of the other regions.

Even so, Corteva set full-year adjusted operating EPS guidance at $0.76 to $0.80. The $0.78 midpoint tops the $0.60 analysts expected.

The EBITDA outlook is $1.1 billion to $1.125 billion. Corteva said it reflects the softer Brazil market.

The guidance reflects the spinoff of its seed business, Vylor, which was completed Oct. 1. Corteva now focuses only on crop protection.

On Tuesday, Corteva and its subsidiary EIDP said their quarterly filing would be delayed. They needed more time to finish spinoff-related processes.

In pre-market trading Thursday, the stock was at $10.95, down about 10%.

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