DuPont has cut its earnings outlook, and the main culprit? The weather. And Soybeans.
“The revised outlook in Agriculture reflects lower than expected corn seed sales and higher than expected seed inventory write-downs. Given favourable soybean economics, soybean sales volumes in North America are higher than expected. However, the higher soybean volume will not fully offset the decline in corn volume, especially given the transition under way in the company’s soybean lineup to newer, higher performing products. The company believes this is a short-term negative trend, and there will be strong demand for its next generation soybean products. The revised outlook also reflects lower than expected crop protection herbicide sales, largely due to weather.”
DuPont said that for the full year, it expects to earn $US4.00 to $US4.10 per share, with the company saying that most of this weakness coming in its Agriculture segment. Current analysts’ expectations are for earnings of $US4.30 per share.
Yesterday, the third Q1 GDP revision showed the economy contracted an estimated 2.9% during the quarter. Most of the U.S. endured an historically harsh winter this year, which many are blaming for the disappointing GDP.
In after hours trade, shares of DuPont were down more than 2% following the announcement.
DuPont’s agricultural rival Monsanto rallied more than 5% yesterday after it reported better than expected quarterly earnings.