Dow Releases Q2 Earnings, Up 3% Year-Over-Year
Dow Chemical Company, parent company to Dow AgroSciences shows the agricultural sciences sector at $1.6 billion in second quarter (Q2) sales. This 3% overall increase stems from a 6% increase in volume in both seeds and crop protection businesses, while price declined 3%.
“In general, seed marketers realized increased financial performance in Q2 2017,” says Blake Croegaert, associate at Verdant Partners. “[This is] due to sales volume increases attributable to the following factors:
- A wet spring across the Midwest led to significant acres of replant, which could have increased sales and earnings depending on replant policies.
- In the case of Dow, their share of soybean acres in the U.S. is higher than corn acres, and with soybean acres up in 2017, more units of soybeans were required.
- Additionally, more farmers are planting Enlist as an alternative trait option to combat herbicide tolerant weeds.”
Dow says seed volume rose in double-digits due to increased demand for the new PowerCore corn and Enlist cotton. At the same time, crop protection volume increased based on greater demand for herbicides and insecticides, which offset lower fungicide demand. Specifically, Arylex broadleaf herbicides and Isoclast insecticide stood out as top performers for the crop protection sector.
Earnings before interest, taxes, depreciation and amortization (also referred to as EBITDA) for the group are $326 million, up from $232 million a year ago. Equity losses are $7 million, compared to $11 million one year ago.