(Reuters) -Agricultural chemical and seed company Corteva (NYSE:CTVA) cut its annual sales expectations as demand for its crop protection products showed signs of contraction.
Rise in carrying cost of stock for distributors driven by higher interest rates and improved product availability have taken a toll on demand for crop protection products such as herbicide and insecticide.
Peer FMC Corp (NYSE:FMC), which had cut its annual revenue outlook in June, said on Thursday it expects global crop protection market to contract by high single to low double digits during the year.
Corteva said it expects net sales between $17.9 billion and $18.2 billion for 2023, below its previous sales forecast of $18.6 billion to $18.9 billion.
The company, spun off in 2019 after a merger of Dow Chemical and Dupont, said its net sales during the second quarter fell 3% to $6.05 billion as it saw a 29% decrease in volume in its crop protection segment.
However, Corteva's net sales from its seed business rose 8% from a year ago, aided by strong prices and increased corn acres in North America that helped offset volume declines driven by Europe, the Middle East and Asia as well as its Russia-exit.
Its operating core profit came in at $1.60 per share in the quarter ended June 30 compared with analysts' average estimate of $1.58.
Shares of the company were down 0.8% in extended trading.