(Reuters) -Agricultural chemical and seed company Corteva Inc on Wednesday raised its full-year forecast after it beat quarterly profit estimates aided by higher prices and strong demand for seeds, sending its shares up 2% in extended trade.
Prices of crops have scaled back after rising to record highs as Russia’s invasion of Ukraine last year hit grain supplies, but still remain higher than historical levels.
Farmers have prioritized on boosting yields to benefit from high prices and offset rising inflation.
The company, spun off in 2019 after a merger of Dow Chemical and Dupont, raised its full-year 2023 sales forecast to $18.6 billion to $18.9 billion, a growth of 7% at the mid-point, while analysts on an average expect $18.49 billion.
“Tight global grain supply continues to put pressure on ending stocks, keeping crop prices above historical averages and farm income levels healthy,” Chief Executive Officer Chuck Magro said in a statement.
Corteva’s operating core profit came in at $1.16 per share in the quarter ended March 31, compared with the analysts’ estimates of 93 cents.
Net sales from its seed business rose 7% to $2.70 billion during the first quarter as higher prices offset decline in volumes due to delayed soybean harvest and supply constraints in South America.
Its crop protection segment also posted a 5% rise in net sales.
Peer Syngenta had also reported higher quarterly sales and profit in April by raising prices to offset higher costs caused by more expensive chemicals and transport.
(Reporting by Sourasis Bose in Bengaluru; Editing by Arun Koyyur and Shailesh Kuber)
