Overview

Corteva, a leading global agricultural company, has reported its financial results for the three and nine months ended September 30, 2024. The company’s performance was mixed, with net sales declining but operating EBITDA remaining relatively stable compared to the prior year period.

Financial Highlights

For the third quarter of 2024, Corteva reported net sales of $2,326 million, down 10% from the same period in 2023. This decrease was driven by an 8% decline in price and a 5% unfavorable currency impact, partially offset by a 3% increase in volume. Cost of goods sold decreased to $1,565 million, down from $1,646 million in the prior year quarter, primarily due to favorable currency effects, ongoing cost and productivity actions, and Crop Protection raw material deflation.

Restructuring and asset related charges were $32 million in Q3 2024, up from $2 million in Q3 2023, primarily related to the Crop Protection Operations Strategy Restructuring Program. Income (loss) from continuing operations after income taxes was $(519) million, compared to $(315) million in the prior year quarter. Operating EBITDA was $(100) million, down from $18 million in Q3 2023, driven by price declines, higher Seed commodity and other costs, and continued investment in Seed R&D, partially offset by Crop Protection raw material deflation and cost savings.

For the first nine months of 2024, Corteva reported net sales of $12,930 million, down 4% from the same period in 2023. This decrease was due to a 2% decline in volume and a 2% unfavorable currency impact. Cost of goods sold decreased to $7,033 million, down from $7,554 million in the prior year period, primarily driven by lower volumes, reduced royalty expense, and ongoing cost and productivity actions.

Restructuring and asset related charges were $199 million in the first nine months of 2024, up from $95 million in the same period of 2023, mainly related to the Crop Protection Operations Strategy Restructuring Program. Income (loss) from continuing operations after income taxes was $913 million, compared to $1,172 million in the prior year period. Operating EBITDA was $2,851 million, down from $2,995 million in the first nine months of 2023, primarily due to lower volumes, competitive Crop Protection pricing, and continued Seed R&D investment, partially offset by Seed pricing gains, reduced royalty expense, and cost savings.

Segment Performance

The Seed segment reported net sales of $691 million in Q3 2024, down 21% from $878 million in Q3 2023. The decrease was driven by a 12% decline in volume, a 5% decrease in price, and a 4% unfavorable currency impact. Segment operating EBITDA was a loss of $320 million, down from a loss of $138 million in the prior year quarter, due to higher commodity and other costs, lower volumes, price declines, and continued R&D investment, partially offset by cost savings.

For the first nine months of 2024, Seed segment net sales were $7,773 million, down 1% from $7,837 million in the same period of 2023. The decrease was driven by a 3% decline in volume and a 1% unfavorable currency impact, partially offset by a 4% increase in price. Segment operating EBITDA was $2,126 million, up 8% from $1,972 million in the prior year period, due to price execution, market share gains, reduced royalty expense, and cost savings, which offset lower volumes, unfavorable currency, and higher commodity costs.

The Crop Protection segment reported net sales of $1,635 million in Q3 2024, down 4% from $1,712 million in Q3 2023. This decrease was driven by a 10% decline in price and a 5% unfavorable currency impact, partially offset by an 11% increase in volume. Segment operating EBITDA was $246 million, up 34% from $184 million in the prior year quarter, due to raw material deflation, productivity savings, and volume growth, partially offset by competitive pricing.

For the first nine months of 2024, Crop Protection segment net sales were $5,157 million, down 9% from $5,682 million in the same period of 2023. This decrease was driven by a 5% decline in price, a 3% unfavorable currency impact, and a 2% decrease in volume, partially offset by a 1% favorable portfolio and other impact. Segment operating EBITDA was $811 million, down 27% from $1,107 million in the prior year period, due to pricing pressure, lower volumes, and unfavorable currency, which more than offset productivity savings.

Restructuring and Strategic Initiatives

In November 2023, Corteva announced a Crop Protection Operations Strategy Restructuring Program to further optimize its Crop Protection manufacturing and external partner network. The company expects to record aggregate pre-tax restructuring and asset related charges of $650 million to $700 million, with cash payments of $330 million to $360 million. These actions are expected to contribute $180 million in annual savings by 2027.

The company also completed its previously announced 2022 Restructuring Actions, which included the company’s Russia Exit. The remaining cash payments related to these actions are $36 million, and the actions are expected to contribute $210 million to $220 million in annual savings by 2025.

Shareholder Returns

Corteva returned approximately $1.1 billion to shareholders during the first nine months of 2024 through share repurchases and common stock dividends. The company’s Board of Directors authorized a $2 billion share repurchase program in September 2022, and the company repurchased and retired 13.8 million shares for $750 million during the first nine months of 2024.

The company also increased its quarterly dividend by 6.25% to $0.17 per share, payable in the fourth quarter of 2024.

Outlook

For the full year 2024, Corteva expects net sales in the range of $17.0 billion to $17.2 billion, a decline of 1% at the midpoint. Operating EBITDA is expected to be in the range of $3.35 billion to $3.45 billion, growth of 1% at the midpoint. Operating Earnings Per Share is expected to be in the range of $2.50 to $2.60 per share, down 5% at the midpoint. Free Cash Flow is expected to be in the range of $1.5 billion to $2.0 billion.

Analysis

Corteva’s financial performance in the third quarter and first nine months of 2024 was mixed, with net sales declining but operating EBITDA remaining relatively stable compared to the prior year periods. The company’s Seed segment continued to face headwinds, with lower volumes and pricing pressures leading to a significant decline in segment operating EBITDA in the third quarter. However, the Seed segment’s performance improved in the first nine months of the year, driven by price execution, market share gains, and cost savings.

The Crop Protection segment showed more resilience, with volume growth in the third quarter offsetting pricing pressure and leading to a 34% increase in segment operating EBITDA. For the first nine months of the year, the Crop Protection segment faced more challenges, with pricing pressure, lower volumes, and unfavorable currency impacts leading to a 27% decline in segment operating EBITDA.

Corteva’s ongoing restructuring and strategic initiatives, including the Crop Protection Operations Strategy Restructuring Program and the 2022 Restructuring Actions, are expected to contribute to the company’s cost and productivity improvement efforts in the coming years. The company’s commitment to returning capital to shareholders through share repurchases and dividend increases is also a positive signal for investors.

Looking ahead, Corteva’s full-year 2024 guidance suggests a mixed outlook, with net sales expected to decline slightly but operating EBITDA and Free Cash Flow expected to remain relatively stable. The company’s ability to navigate the competitive pricing environment in Crop Protection and continue to execute on its Seed pricing strategy will be key to its performance in the coming year.

Overall, Corteva’s financial results in the third quarter and first nine months of 2024 highlight the company’s efforts to optimize its operations and return value to shareholders, while also facing ongoing challenges in its Seed and Crop Protection segments. Investors will be closely watching the company’s progress in implementing its strategic initiatives and its ability to adapt to the evolving market conditions in the agricultural industry.