Indianapolis-based Dow AgroSciences said sales and operating earnings rose in the third quarter, thanks in part to strong demand for seeds and crop-protection products in Latin America.
The subsidiary of Dow Chemical Co. on Thursday reported quarterly sales of $1.2 billion, up 6 percent from the same quarter of 2015.
Demand from Latin America drove double-digit sales gains in corn and soybean seeds. Crop-protection sales declined modestly overall despite gains in Latin America.
Insecticide sales improved because of higher prices, while herbicide and fungicide sales declined on lower prices and volume.
Earnings before interest, tax, depreciation and amortization, or EBITDA, decreased to $101 million from $582 million in the year-ago period. But last year’s third quarter reflected a gain on Dow Chemical’s $860 million sale of specialty chemical business AgroFresh.
Operating EBITDA was $102 million, up from a loss of $39 million in the year-ago quarter. Equity earnings were $8 million, compared to $2 million a year ago.
Dow Chemical earnings
Midland, Michigan-based Dow Chemical on Thursday reported a third-quarter profit of $719 million.
On a per-share basis, the company said it had profit of 63 cents. Earnings, adjusted for non-recurring costs, came to 91 cents per share.
The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 80 cents per share.
The chemicals maker posted revenue of $12.48 billion in the period, which also topped Street forecasts. Four analysts surveyed by Zacks expected revenue of $12.08 billion.
Earlier this week, Dow Chemical’s CEO said company’s planned $59 billion merger with DuPont Co. may be delayed until February from a planned closing late this year, as European antitrust officials take more time to consider potential competition issues in pesticides and crop seeds.
Regulators’ “greatest concern is agriculture,” Dow’s Andrew Liveris told Bloomberg News on Monday. “One of the strongest lobbies in the world out there is the farm lobby, and in Europe, the agricultural sector is very, very critical to them, somewhat protected.”
Shareholders in the two largest U.S. chemical companies approved the 50-50 merger in June and Dow Chief Financial Officer Howard Ungerleider said in July that the merger was on track to close by the end of the year.
The plan is to divide the merged company into three separate publicly traded entities, including an agriculture operation that would be larger than market leaders Monsanto Co. and Syngenta AG.
The companies said Wilmington, Delaware, will be the headquarters for the combined agricultural business, but Indianapolis—where Dow AgroSciences, which has about 1,500 employees—will be one of its two “global business centers.”
The European Commission this month delayed its decision deadline until Feb. 6 as it sought additional information about the transaction. Liveris said the value created by the deal made the wait worthwhile.
“That’s worth a few months of delay,” he said in the interview.
DuPont CEO Ed Breen on Tuesday said he now expects the deal to close by the end of March.
“We continue to work constructively with regulators in key jurisdictions to close the merger as soon as possible,” Breen said in the company’s third-quarter earnings statement. “In the event that regulators in those jurisdictions use their full allotted time, closing would be expected to occur in the first quarter of 2017.”
Liveris wouldn’t say whether the companies planned to sell assets to help win approval. Bloomberg reported this month that Dow is seeking a buyer for its copolymers business to ease regulators’ concerns. Likewise, DuPont is planning to sell an herbicides business, Bloomberg also reported.
Liveris, 62, has spent four decades at Dow, including more than a decade as chairman and chief executive officer. He will become chairman of the combined company, DowDuPont Inc., and plans to step down after the deal goes through. Breen will serve as CEO.
Dow Chemical shares rose 1.7 percent Thursday morning, to $54.66 each.