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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowDow AgroSciences LLC reported record sales of $1.9 billion in the second quarter, an increase of 3 percent over last year's second period, the Indianapolis-based company reported Wednesday morning.
The subsidiary of Midland, Mich.-based Dow Chemical Co. reported quarterly earnings before interest, taxes, depreciation and amortization, or EBITDA, of $281 million, down $9 million from a year ago.
On a year-to-date basis, Dow Agro experienced first-half records with $4 billion in sales and $810 million in EBITDA.
Crop-protection sales rose 3 percent in the quarter, led by insecticides, which reported double-digit gains in all regions.
Quarterly seed sales increased 3 percent, with growth in corn and soybeans in North America and Latin America.
Meanwhile, the parent company posted second-quarter earnings that exceeded analysts’ estimates as the company expanded margins by raising product prices and cutting expenses.
The largest U.S. chemical maker said profit excluding some items was 74 cents a share, exceeding the 71-cent average estimate of 17 analysts compiled by Bloomberg.
Revenue gained 2.3 percent, to $14.9 billion, topping the $14.8 billion average estimate.
Prices rose 2 percent on average while sales volumes expanded 1 percent, with revenue up across all six of Dow’s business units.
Dow CEO Andrew Liveris is expanding chemical output in the U.S. and Saudi Arabia while also trying to sell underperforming units. His strategy of integrating commodity chemicals with higher-value downstream businesses such as auto plastics has been criticized by activist investor Third Point LLC, which said in January that the company should be broken up.
Third Point, founded and led by Daniel Loeb, said in a May letter to investors that Liveris should “embrace” Dow’s position as one of the biggest commodity chemical businesses, instead of pursuing a strategy that reduces earnings by $2.5 billion a year.
“Dow is on a mission to prove they can add more value than Third Point suggests,” said John Roberts, a New York-based analyst at UBS Securities LLC.
Second-quarter profit fell to $882 million compared with $2.34 billion a year earlier.
Dow shares rose 44 cents Wednesday morning, to $52.74 each. The stock was up 18 percent this year through Tuesday.
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