DuPont (DD) has cut its earnings guidance for the year, pointing to a weaker-than-expected quarterly performance of its agriculture business.
For the second quarter, the company now expects EPS below the $1.28 a share posted a year earlier. The lower forecast is based on an expected yearly EPS drop of $4 to $4.10 a share from its previous estimate of $4.20 to $4.45. The Wilmington, Del., chemicals-based company said that most of this weakness is coming from its “Agriculture and, to a lesser extent, Performance Chemicals segments”. Current analysts’ expectations are for earnings of $4.30 per share.
“The revised outlook in Agriculture reflects lower than expected corn seed sales and higher than expected seed inventory write-downs. Given favorable soybean economics, soybean sales volumes in North America are higher than expected”, DuPont said in statement. “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 also said that its results in the performance chemicals segment will be impacted by lower than expected selling prices in refrigerants for mobile and stationary applications.
In AH trade, shares in the $62 billion market cap company fell more than 2% following the announcement.