Core Viewpoint - Corteva, Inc. has authorized a new $3 billion share repurchase program, reflecting the company's focus on disciplined capital deployment and confidence in its future [1][3]. Summary by Sections Share Repurchase Program - The new $3 billion share repurchase program is effective immediately and does not have an expiration date, allowing management discretion in share purchases [1]. - This program is in addition to the existing $2 billion program announced in September 2022, which had approximately $750 million remaining as of September 30, 2024 [2]. Financial Strategy and Outlook - The timing, number, and value of shares repurchased will depend on various factors, including market price, economic conditions, legal requirements, and other capital uses such as organic growth, dividends, and acquisitions [2]. - The CEO of Corteva emphasized that the new share repurchase program, along with a dividend increase earlier in the year, demonstrates the company's strong financial outlook and commitment to disciplined capital deployment [3]. Company Overview - Corteva, Inc. is a global pure-play agriculture company focused on delivering innovative solutions to agricultural challenges, with a diverse mix of seed, crop protection, and digital products [4]. - The company aims to maximize productivity for farmers while engaging with stakeholders throughout the food system, ensuring progress for future generations [4].

Core Insights - Corteva has announced a proprietary non-GMO hybrid technology for wheat, marking a significant advancement in wheat production, which has historically lagged behind other crops like corn in terms of hybridization benefits [1][3]. Group 1: Technology and Innovation - The new hybrid wheat technology is expected to increase yield potential by 10% while utilizing the same land and resources, enhancing food security for farmers globally [2]. - Corteva's hybrid wheat exhibits approximately 20% higher yields than elite varieties in drought conditions, aiding farmers in adapting to climate change [2]. - The proprietary technology allows for rapid genetic gains and commercial-scale seed delivery, working effectively across 100% of wheat germplasm [3]. Group 2: Market Impact - Wheat is cultivated on about 550 million acres globally, accounting for 20% of calories consumed worldwide, highlighting its importance in the food supply [4]. - Corteva plans to launch hybrid Hard Red Winter wheat in North America by 2027, expanding its product portfolio over time [4]. Group 3: Company Overview - Corteva, Inc. is a global agriculture company focused on innovation and customer engagement, aiming to address significant agricultural challenges while maximizing productivity for farmers [5].

Core Insights - Corteva Inc. and bp announced a collaboration to form a joint venture focused on producing crop-based biofuel feedstocks to meet the growing demand for sustainable aviation fuel (SAF) [1][3] - The joint venture aims to deliver one million metric tons per year of biofuel feedstocks for SAF production by the mid-2030s [3] - The partnership is positioned to leverage Corteva's agricultural technology and bp's refining capabilities to support the decarbonization of the aviation sector [5][6] Company and Industry Overview - Corteva plans to contract with farmers in North and South America and Europe to grow proprietary crops such as mustard seed, sunflower, and canola, which are suitable for SAF production [4] - The joint venture will introduce new cropping systems that meet EU RED III criteria and qualify for US Low Carbon Intensity policy incentives, creating new revenue streams for farmers [4] - The European Union is implementing a SAF mandate that requires at least 20% SAF in fuel uplift at EU airports by 2035 and 70% by 2050, indicating a significant market opportunity for biofuel feedstocks [2]

Industry Overview - The Zacks Agriculture – Operations industry is expected to benefit from innovations and increasing consumer demand for healthy products, with positive agricultural export projections for fiscal 2024 supporting a favorable near-term outlook [1] - The industry includes companies involved in the production, transportation, storage, processing, and distribution of agricultural commodities, as well as those engaged in dairy operations and food ingredient development using gene-editing technology [3][4] Market Trends - Agricultural export projections for fiscal 2025 are estimated at $169.5 billion, a decline of $4 billion from fiscal 2024, primarily due to reduced unit values of soybeans, corn, and cotton, along with lower beef volumes [5][6] - The industry is experiencing a shift towards organic production techniques driven by growing consumer demand for healthier food, which is reducing the use of chemicals and pesticides [7][8] Challenges - Industry participants face significant challenges including fluctuating commodity prices, rising input costs, trade uncertainties, and increased operational expenses, all of which are impacting productivity and profitability [2][9] - Elevated costs due to inflation and supply chain challenges are squeezing profit margins, leading companies to implement pricing strategies and partnerships to mitigate these pressures [10][11] Performance Metrics - The Zacks Agriculture – Operations industry currently holds a Zacks Industry Rank of 86, placing it in the top 35% of over 250 Zacks industries, indicating bright near-term prospects [12][13] - Over the past year, the industry has underperformed the S&P 500 and the Zacks Consumer Staples sector, with a collective decline of 8.4% compared to a 5.8% increase for the sector and a 33.8% increase for the S&P 500 [15] Valuation - The agriculture – operations industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 12.41X, significantly lower than the S&P 500's 22.7X and the sector's 17.33X [16] Company Highlights - **Calavo Growers**: A leader in the avocado industry, with a Zacks Rank 1 (Strong Buy). The company has seen a 14.1% stock rally in the past year, and its fiscal 2024 earnings estimate has increased by 13.9% [18][19] - **Corteva**: A pure-play agriculture company with a Zacks Rank 3 (Hold). The company has experienced a 23.4% stock increase over the past year, although its fiscal 2024 earnings estimate has decreased by 2.3% [20][21] - **Dole**: A global leader in fresh produce with a Zacks Rank 3 (Hold). The company has seen a 40.8% stock increase in the past year, with its fiscal 2024 sales estimate showing a growth of 0.5% [22][23] - **Adecoagro**: Engaged in various agricultural activities in South America, with a Zacks Rank 3 (Hold). The company’s shares have risen 10% in the past year, although its fiscal 2024 earnings estimate has decreased by 6.5% [24][26]

Core Insights - The article discusses the investment position of the analyst in CTVA, indicating a beneficial long position through various means such as stock ownership and options [1]. Group 1 - The analyst expresses personal opinions regarding CTVA and clarifies that no compensation is received for the article, aside from Seeking Alpha [1]. - There is no business relationship disclosed with any company mentioned in the article, emphasizing the independence of the analysis [1].

Part I Financial Information [Item 1. Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Presents Corteva's unaudited interim consolidated financial statements for the three and nine months ended September 30, 2024 [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Details Corteva's consolidated statements of operations, including net sales, income, and earnings per share trends for the reported periods Consolidated Statements of Operations Highlights (in millions, except per share amounts) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $2,326 | $2,590 | $12,930 | $13,519 | | **Income (loss) from continuing operations** | $(519) | $(315) | $913 | $1,172 | | **Net income (loss)** | $(521) | $(318) | $958 | $998 | | **Net income (loss) attributable to Corteva** | $(524) | $(321) | $948 | $988 | | **Diluted earnings (loss) per share** | $(0.76) | $(0.45) | $1.35 | $1.39 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Summarizes Corteva's financial position, detailing assets, liabilities, and equity as of September 30, 2024, and December 31, 2023 Consolidated Balance Sheet Summary (in millions) | Metric | Sep 30, 2024 | Dec 31, 2023 | Sep 30, 2023 | | :--- | :--- | :--- | :--- | | **Total current assets** | $15,649 | $16,260 | $16,333 | | **Total Assets** | $41,908 | $42,996 | $43,110 | | **Total current liabilities** | $10,424 | $10,409 | $10,348 | | **Total Liabilities** | $16,929 | $17,717 | $17,643 | | **Total Corteva stockholders' equity** | $24,737 | $25,037 | $25,226 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Outlines Corteva's cash flow activities, including operating, investing, and financing, for the nine months ended September 30, 2024 Consolidated Cash Flow Summary (in millions) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | **Cash used for operating activities** | $(2,028) | $(2,604) | | **Cash used for investing activities** | $(466) | $(1,773) | | **Cash provided by financing activities** | $2,137 | $3,603 | | **Increase (decrease) in cash** | $(402) | $(842) | [Notes to the Interim Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20the%20Interim%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Provides detailed information on accounting policies, revenue recognition, restructuring, contingent liabilities, debt, and segment performance - The company finalized the purchase price allocation for the **2023 acquisitions of Stoller and Symborg** in the first quarter of 2024 with no material adjustments[32](index=32&type=chunk) - The company repurchased and retired **13.8 million shares for $750 million** during the nine months ended September 30, 2024, under its **$2 billion share buyback plan**[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, segment results, restructuring programs, liquidity, and the full-year 2024 outlook [Recent Developments](index=48&type=section&id=Recent%20Developments) Highlights ongoing restructuring programs and share repurchase activities, detailing expected charges and savings - The Crop Protection Operations Strategy Restructuring Program is expected to record aggregate pre-tax charges of **$650 million to $700 million** and achieve an estimated **$180 million of savings** on a run rate basis by **2027**[189](index=189&type=chunk)[191](index=191&type=chunk) - The **2022 Restructuring Actions** are expected to achieve an estimated **$210 million to $220 million of savings** on a run rate basis by **2025**[194](index=194&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Analyzes net sales and operating EBITDA changes for Q3 and nine months ended September 30, 2024, driven by price, volume, and currency Net Sales Change Analysis - Q3 2024 vs Q3 2023 | Region | Net Sales Change (%) | Price & Product Mix (%) | Volume (%) | Currency (%) | | :--- | :--- | :--- | :--- | :--- | | **Total** | **(10)%** | **(8)%** | **3%** | **(5)%** | Net Sales Change Analysis - Nine Months 2024 vs 2023 | Region | Net Sales Change (%) | Price & Product Mix (%) | Volume (%) | Currency (%) | | :--- | :--- | :--- | :--- | :--- | | **Total** | **(4)%** | **—%** | **(2)%** | **(2)%** | [Corporate Outlook](index=53&type=section&id=Corporate%20Outlook) Presents Corteva's full-year 2024 projections for net sales, operating EBITDA, operating EPS, and free cash flow Full-Year 2024 Outlook | Metric | Expected Range | | :--- | :--- | | Net Sales | $17.0B - $17.2B | | Operating EBITDA | $3.35B - $3.45B | | Operating EPS | $2.50 - $2.60 | | Free Cash Flow | $1.5B - $2.0B | [Segment Reviews](index=54&type=section&id=Segment%20Reviews) Reviews the performance of Seed and Crop Protection segments, detailing sales and operating EBITDA changes for Q3 2024 Seed Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $691M | $878M | -21% | | Segment Operating EBITDA | $(320)M | $(138)M | -132% | Crop Protection Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,635M | $1,712M | -4% | | Segment Operating EBITDA | $246M | $184M | +34% | [Liquidity & Capital Resources](index=59&type=section&id=Liquidity%20%26%20Capital%20Resources) Details Corteva's cash position, debt levels, credit access, and cash flow from operations for the first nine months of 2024 - The company had access to approximately **$6.2 billion in committed and uncommitted unused credit lines** at September 30, 2024[269](index=269&type=chunk) - Cash used for operating activities for the first nine months of 2024 was **$(1,871) million**, an improvement from **$(2,574) million** in the same period of 2023, driven by favorable working capital changes[278](index=278&type=chunk) - The company returned approximately **$1.1 billion to shareholders** during the first nine months of 2024 through share repurchases and dividends[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to prior disclosures for detailed information on market risk exposures and financial instrument management [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes - The CEO and CFO concluded that the company's **disclosure controls and procedures are effective** as of September 30, 2024[295](index=295&type=chunk) - No **material changes in internal control over financial reporting** occurred during the quarter ended September 30, 2024[295](index=295&type=chunk) Part II Other Information [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing legal proceedings, including FTC investigations, product liability lawsuits, patent disputes, and legacy PFAS litigation - The Federal Trade Commission (FTC) and several state attorneys general have filed a lawsuit against Corteva alleging **anticompetitive business practices**[300](index=300&type=chunk) - Corteva faces pending personal injury and remediation lawsuits related to **chlorpyrifos**, the active ingredient in its former insecticide product, **Lorsban®**[301](index=301&type=chunk) - The company is engaged in multiple **patent and contract disputes** with competitors Bayer and Inari concerning herbicide resistance technologies and soybean traits[302](index=302&type=chunk)[304](index=304&type=chunk)[308](index=308&type=chunk) - Significant litigation related to legacy EIDP businesses, particularly concerning **PFOA and PFAS contamination**, is subject to a **cost-sharing memorandum of understanding (MOU)** with Chemours and DuPont[310](index=310&type=chunk)[312](index=312&type=chunk) [Item 1A. Risk Factors](index=66&type=page&id=Item%201A.%20Risk%20Factors) States no material changes to the risk factors previously disclosed in the most recent Annual Report on Form 10-K [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details share repurchases during Q3 2024, including shares bought back and remaining authorization under the buyback program Issuer Purchases of Equity Securities (Q3 2024) | Month | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining under Program (in millions) | | :--- | :--- | :--- | :--- | | July 2024 | 1,929,167 | $53.58 | $897 | | August 2024 | 2,792,563 | $52.51 | $750 | | **Total** | **4,721,730** | **$52.95** | **$750** | Consolidated Financial Statements of EIDP, Inc. (Unaudited) Presents separate unaudited financial statements for EIDP, Inc., a Corteva subsidiary, with key differences from consolidated results [Notes to the EIDP Interim Consolidated Financial Statements](index=77&type=section&id=Notes%20to%20the%20EIDP%20Interim%20Consolidated%20Financial%20Statements) Clarifies differences between EIDP and Corteva financials, including preferred stock, related-party loans, and cash management agreements - Primary differences between Corteva and EIDP financials are EIDP's **outstanding preferred stock**, a related-party loan from Corteva (**repaid in Q4 2023**), and a different capital structure[341](index=341&type=chunk) - EIDP and Corteva are party to a **Master In-House Banking Agreement** for cash and liquidity management. As of September 30, 2024, EIDP had a receivable from Corteva of **$1,505 million** under this agreement[346](index=346&type=chunk)

Financial Data and Key Metrics Changes - Corteva reported organic sales down 5% year-over-year in Q3 2024, with crop protection up 1% and seed down 17% [20] - Operating EBITDA for the year-to-date is approximately $2.9 billion, down 5% compared to the prior year, with an operating EBITDA margin of 22%, essentially flat year-over-year [23][24] - The updated full-year guidance reflects net sales in the range of $17 billion to $17.2 billion, down 1% at the midpoint compared to the prior year [26] Business Line Data and Key Metrics Changes - The seed business delivered a strong performance with approximately $175 million in controllable benefits year-to-date, despite a 12% decline in seed volumes primarily due to reduced corn area in Argentina [8][20] - Crop protection volumes were up 11%, led by Latin America and North America, with new crop protection products seeing volume increases of over 20% [21][10] - Year-to-date, seed organic sales were up 1% with pricing up 4%, while crop protection organic sales were down 7% with pricing down 5% [22] Market Data and Key Metrics Changes - The agricultural markets remain mixed, with record demand for food and fuel, but competitive market dynamics are expected to continue into next year [11] - The crop protection market has turned a corner in every major market except Brazil, where conditions remain challenging [11] - In 2025, total area planted by farmers in the U.S. is expected to be nearly flat year-over-year, with Brazil showing a mid-single-digit increase for corn and soybeans [15] Company Strategy and Development Direction - Corteva is committed to focusing on differentiated and new technologies that warrant a premium in the market, with over 150 crop protection registration approvals year-to-date [10] - The company anticipates a continuation of record demand for grain, oilseeds, meat, and biofuels, with farmers prioritizing top-tier technologies to maximize yields [14] - The strategic shift from being a technology buyer to a technology seller is seen as a long-term growth opportunity for Corteva [56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the stabilization of the crop protection industry, particularly in North America, while acknowledging ongoing challenges in Brazil [86] - The company expects to achieve double-digit earnings growth and margin expansion in 2025, driven by controllable factors and new product introductions [84] - Management highlighted the importance of the upcoming Investor Day for providing further insights into growth strategies and market conditions [40] Other Important Information - Corteva is on track to deliver $1.5 billion to $2 billion in free cash flow for the year, along with $1 billion in share repurchases [38] - A new Executive Vice President for the seed business will be appointed, with Judd O'Connor succeeding Tim Glenn [43][44] Q&A Session Summary Question: Breakdown of $150 million inflation and other costs - David Johnson indicated that about two-thirds to 75% of the $150 million is in the seed business, primarily related to trade transition costs, with the remainder attributed to inflation [48][49] Question: Guidance for seed cost deflation and CPC cost deflation - Chuck Magro noted that the guidance reflects a gross benefit of $600 million driven by cost management and productivity, with deflation accounting for about half of that [54][55] Question: Impact of deferred seed sales from Q3 to Q4 - Tim Glenn clarified that the reduction in Argentina is not a deferral but a permanent loss due to a 20% area reduction, while Brazil's summer sales are expected to be impacted as well [60][62] Question: Seed royalties expectations for next year - Chuck Magro expressed confidence in the journey to royalty neutrality, indicating that the preliminary view for next year is slightly less than the average of about $100 million [66][67] Question: Pricing environment for crop chemicals in Brazil - Robert King explained that Brazil's pricing was down about 18% for the quarter due to competition, but the company expects to finish the year in the mid-single digits for price [96][99]

Financial Performance - Q3 2024 - Net sales decreased by 10% to $2326 million compared to $2590 million in 3Q 2023[80] - Operating EBITDA was $(100) million, a decrease of 656% compared to $18 million in 3Q 2023[80] - Operating EBITDA margin was (43)%, a decrease of 499 bps compared to 07% in 3Q 2023[80] - Operating EPS decreased by 113% to $(049) compared to $(023) in 3Q 2023[80] Financial Performance - Year-to-Date 2024 - Net sales decreased by 4% to $129 billion compared to $132 billion YTD[33,49] - Organic sales decreased by 5% YTD[39] - Operating EBITDA decreased by 5% to $25 billion YTD[41,44] - Operating EBITDA margin decreased by 10 bps to 220% YTD[46] Updated FY 2024 Outlook - Operating EBITDA is expected to be $335 - $345 billion, with an EBITDA margin of approximately 20% at the mid-point[28] - Free cash flow is reaffirmed at $15 - $20 billion[28] - Approximately $1 billion in share repurchases are expected for FY 2024[28] Preliminary View of 2025 - The company anticipates double-digit EBITDA growth and margin expansion in FY2025[30] - FY2025 Operating EBITDA is projected to be between $36 billion and $40 billion, with an Operating EBITDA Margin of approximately 220%[71] - Net Sales are expected to be $173 - $177 billion[70]

Core Insights - Corteva, Inc. reported a revenue of $2.33 billion for the quarter ended September 2024, reflecting a decrease of 10.2% year-over-year [1] - The company's EPS was -$0.49, compared to -$0.23 in the same quarter last year [1] - Revenue fell short of the Zacks Consensus Estimate of $2.69 billion, resulting in a surprise of -13.39% [2] - The EPS also missed the consensus estimate of -$0.31, with a surprise of -58.06% [2] Revenue Breakdown - Seed revenue was $691 million, significantly below the average estimate of $903.44 million, marking a year-over-year decline of 21.3% [3] - Crop Protection revenue totaled $1.64 billion, compared to the estimated $1.76 billion, representing a decrease of 4.5% year-over-year [3] - Other Crop Protection revenue was $246 million, exceeding the estimate of $188.06 million, but still down 3.5% from the previous year [3] - Seed revenue from Other sources was $77 million, slightly above the estimate of $75.93 million, showing an increase of 28.3% year-over-year [3] - Herbicides revenue was $736 million, below the estimate of $833.21 million, reflecting a decline of 9.7% [3] - Insecticides revenue was $437 million, slightly above the estimate of $425.70 million, with a year-over-year increase of 5.1% [3] - Fungicides revenue was $216 million, below the estimated $303.82 million, down 4.4% year-over-year [3] - Soybean seed revenue was $164 million, below the estimate of $207.20 million, down 13.2% year-over-year [3] - Corn seed revenue was $315 million, significantly below the estimate of $508.43 million, marking a decline of 35.3% [3] - Other oilseeds seed revenue was $135 million, slightly above the estimate of $126.35 million, down 4.9% year-over-year [3] Operating Performance - Operating EBITDA for Seed was -$320 million, worse than the average estimate of -$174.45 million [3] - Operating EBITDA for Corporate was -$26 million, slightly better than the average estimate of -$27.91 million [3] Stock Performance - Corteva, Inc. shares have returned +8.5% over the past month, outperforming the Zacks S&P 500 composite's +0.7% change [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [4]

Core Insights - Corteva, Inc. reported a quarterly loss of $0.49 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.31, and compared to a loss of $0.23 per share a year ago, indicating a significant earnings surprise of -58.06% [1] - The company posted revenues of $2.33 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate by 13.39% and down from $2.59 billion in the same quarter last year [2] - Corteva's shares have increased by approximately 28.9% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] Earnings Outlook - The future performance of Corteva's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook, which includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.23 on revenues of $3.86 billion, and for the current fiscal year, it is $2.66 on revenues of $17.18 billion [7] Industry Context - The Agriculture - Operations industry, to which Corteva belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting that the industry's outlook could materially impact Corteva's stock performance [8] - Another company in the same industry, Dole, is expected to report quarterly earnings of $0.20 per share, reflecting a year-over-year decline of -16.7%, with revenues projected at $2 billion, down 2.1% from the previous year [9][10]