Why Agriculture Company Corteva's Shares Are Slipping Today

Corteva Inc CTVA shares are trading lower by around 2% after it reported weak preliminary Q3 results and cut FY23 operating EPS and net sales guidance.

Q3 Preliminary: The company sees net sales of around $2.6 billion, operating EBITDA of about $18 million, and operating EPS of a loss of about $(0.23) vs. street view of $(0.22).

FY23 Outlook: CTVA lowered the guidance for net sales to $17.0 billion-$17.3 billion (from $17.9 billion-$18.2 billion earlier) vs. consensus of $17.98 billion.

Also, the company reduced guidance for operating EBITDA to $3.25 billion-$3.45 billion (from $3.50 billion-$3.65 billion) and operating EPS to $2.50-$2.70 (from $2.75-$2.90) vs. street view of $2.81.

The weak outlook is due to significant order delays on just-in-time farmer purchases on both plantings and crop protection applications in Brazil. 

Also, CTVA sees tighter farmer margins and, ongoing channel inventory destocking, and pricing and volume pressures in crop chemicals related to elevated generic imports in Brazil. 

The company expects lower Q4 seed deliveries owing to a decline in Summer corn planted area, and potentially delayed and reduced Safrinha planted area for the 2023/2024 crop season.

CTVA expects to achieve share repurchases worth $750 million in 2023.

The company plans to release Q3 earnings results on November 9.

Price Action: CTVA shares are down by 2.89% at $47.30 on the last check Friday.