Strong demand from farmers boosted sales by 8 percent at Dow AgroSciences LLC in the third quarter, but continued investments in new technologies slashed profits by 16 percent.
The Indianapolis-based company, a unit of Michigan-based Dow Chemical Co., brought in revenue of $1.3 billion in the three months ended Sept. 30. The increase over the same quarter last year was driven mostly by higher volume and only slightly from higher prices.
Sales grew by double-digit percentages in both North America and Latin America, the company reported on Wednesday morning.
“The segment continues to benefit from solid industry fundamentals, with elevated farm income levels providing strong incentive for farmers to maximize yields,” Dow officials said in a prepared statement.
Earnings in the quarter totaled $63 million, before accounting for interest, taxes, depreciation and amortization. On that same basis a year ago, Dow AgroSciences earned $75 million.
Sales of Dow Agro Sciences’ crop-protection products grew by 6 percent during the third quarter, while sales of seeds, genetic traits and oils enjoyed growth of 21 percent.
Overall, Dow Chemical’s earnings fell by 39 percent in the third quarter to $497 million, or 42 cents per share. Excluding special charges from the same quarter a year ago, Dow’s profit would have been down by 32 percent. On that same adjusted basis, the company’s revenue would have fallen by 7 percent.
Growth in the global chemical business has been anemic, which forced Dow to announce Tuesday that it will close 20 manufacturing plants and cut 2,400 jobs.