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Corn, cotton help Dow Chemical beat profit hopes


images (3) A jump in agriculture profits, spurred by bumper demand for cotton seed and cereals herbicides, helped Dow Chemical post a 73% jump in earnings, beating Wall Street expectations.

The industrial heavyweight, whose technology is used in everything from paints to smartphones, reported earnings attributable to holders of its common stock of $982m for the April-to-June period, equivalent to $0.85 a share on an underlying basis.

The figure beat analysts’ hopes of a $0.81-a-share result, and, on revenues, the group trounced expectations, lifting sales by 17.8% to $16.0bn. Wall Street had expected a $14.7bn figure.

The performance, termed "tremendous progress" by Andrew Liveris, the Dow chief executive, reflected improvements across the business.

However, the group seized on growth at its health and agriculture division which saw its earnings before interest, tax, depreciation and amortisation jump 45%, driven both by improved sales and a 3.7 percentage point rise in margins.

Cotton and corn

In seeds, the popularity of genetically-modified corn "drove significant volume increases" in sales of the SmartStax product sold in association with Monsanto.

"Cotton finished a strong season with first-half sales up more than 50%, driven by an increase in US planted acres," the group added.

Growth in sales of agrichemicals was driven by increases in sales volumes, notably of new rice and cereals herbicides, and of pasture products.

However, Dow fell short of breaking down the "double digit" growth in agrichemical sales, and the dynamic between volume and price movements, and so failing to give extra insight into the market.

Syngenta, the world’s top agrichemicals group, surprised farmers and investors last week by revealing the first price rises in farm sprays two years.

Dow shares lost early gains to close 2.4% lower at $34.99 in New York, on a weak day for Wall Street shares.

http://www.agrimoney.com/news/corn-cotton-help-dow-chemical-beat-profit-hopes–3407.html

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