(Reuters) -Corteva cut its annual revenue and operating profit expectations on Wednesday as the U.S. agricultural chemicals maker faces falling prices at its crop protection unit, sending its shares down 5.7% in after-the-bell trading.
A drop in crop prices has forced farmers to rein in their spending, hurting demand for pesticides and insecticides.
“While the volume of the global crop protection industry has begun to stabilize, price pressure has increased due to the competitive environment and tighter margins for farmers,” the company said.
Corteva (NYSE:) forecasts operating earnings between $2.60 and $2.80 per share, compared to $2.70 to $2.90 per share previously.
Analysts on average had expected operating profit of $2.77 per share, according to LSEG data.
Corteva, which competes with Syngenta and German companies BASF and Bayer (OTC:), expects net sales of between $17.2 billion and $17.5 billion, up from the $17.4 billion to $17.7 billion previously estimated predicted.
Corteva’s crop protection product sales in the second quarter were flat from a year earlier, as an increase in volumes was offset by a 5% price decline.
Demand for crop protection products in South America remains subdued as floods in major grain producer Brazil have hit demand.
Total net sales rose 1% to $6.11 billion, helped by a 2% increase in the seed segment.
A 5% price increase, especially in North America where corn and soybean production is expected to remain high this year amid favorable weather conditions, supported the seed sector.
Corteva, spun off in 2019 following a merger between Dow Chemical and Dupont, reported operating income of $1.83 per share for the three months ended June 30, beating estimates of $1.73.
