Slowing demand for ag products and fluctuating currencies hurt DuPont’s agriculture business in 2015’s third quarter, according to the company’s latest earnings report.
"While our bottom line continues to benefit from the positive effects of our operational redesign and productivity improvements, we are not pleased with our results this quarter," said Nick Fanandakis, Executive Vice President and CFO. "We saw significant negative impacts from currency as well as market weakness in agriculture, emerging market industrial production, and oil and gas.”
DuPont’s ag business includes Pioneer seeds as well as crop protection products for corn, soybeans, cotton and more.
Agriculture represents a major business segment for DuPont, bringing the company $1.093 billion in sales for the quarter ending Sept. 30. But that was off 30% on a quarterly basis, with 17% due to lower sales volume and 15% due to currency.
Companywide, net sales were down 17% at DuPont in the third quarter. The company anticipates producing annual operating earnings per share of $2.75.
In the first nine months of the year, DuPont’s agriculture business has generated more than $8 billion in sales and $1.7 billion in operating earnings. Losses widened for the business sector in the third quarter, with a $210 million operating loss in 2015’s third quarter compared to a $56 million operating loss for the same period last year.
“A seasonal operating loss of $210 million was $154 million larger as improved productivity and cost reductions, increases in local price, $27 million gains from asset sales and a $21 million benefit related to prior periods were more than offset by lower volumes and a $108 million negative currency impact,” the company explained. “Decreased volumes are due to lower seed volumes and reduced demand for insect control products, primarily in Brazil, and an about $40 million negative impact from the LaPorte manufacturing facility shutdown. Excluding the impact of currency, the operating loss would have been $102 million.”