Dow Chemical followed rivals DuPont and Syngenta in highlighting
setbacks to seed sales from the late US spring, and the turn by Brazilian
farmers away from corn, but achieved a rise in earnings in agriculture
The plastics-to-energy conglomerate said that a "series of
weather- and transported-related issues in North America" had affected many of
its businesses in the January-to-March quarter, hurting earnings by an
estimated $0.03-0.04 per share, equivalent to about $35m-50m.
In agriculture, the region's cold and extended winter had
meant a "late start to the season" for spring plantings and fieldwork, a factor
which "contributed to lower sales of corn", the most popular US crop, besides
canola, which is expected to enjoy near-record sowings in Canada.
A 7% drop in Dow's seed sales during the quarter was also
attributed to "lower planted acreage of corn and sunflowers" in Latin America,
where Brazilian farmers have cut sowings of second, or safrinha, corn because
of a drop in prices from a year ago.
However, Dow's sales of agrichemicals grew 4%, reflecting
primarily higher sales in Europe, where a mild winter "led to an early start to
the cereal herbicide season".
Like its rivals, Dow also flagged increased sales of
insecticides in Latin America, where Brazil especially has suffered from an
outbreak of the Helicoverpa moth, whose caterpillar, the corn ear worm, can
cause significant damage to a range of crops.
Furthermore, the group reported a 28% jump in sales of new
crop protection sprays, led by its pyroxsulam herbicide, designed to control
weeds in wheat crops and used in the UK, for example, to control blackgrass,
ryegrasses and wild oats.
Indeed, "accelerating" problems of weeds becoming resistant
to historic herbicides has been driving demand for new alternatives.
Earnings before interest, tax, depreciation and amortisation
(ebitda) in the division rose 9.3% to $529m, well ahead of growth in sales of 0.8%,
"Increased volume and lower operating expenses drove segment
margin expansion," Dow said.
Group earnings rose 75% to $964m, on revenues flat at $11.7bn,
with profitability boosted by efficiency measures, including the 2012 drive which
cut 5% of the group's workforce and axed 20 plants.
The earnings were equivalent to $0.79 per share, above the $0.71
that Wall Street had expected.
Dow shares stood 1.1% higher at $49.50 in lunchtime deals in