Corteva (CTVA) Q2 FY26 earnings call: guidance and Q&A

What are the expectations for Brazil corn acres and pricing/mix, especially regarding Conkesta penetration, in the second half?

Management expects Brazil corn area to be approximately flat, with strong product portfolio and pricing in Latin America. Conkesta E3 penetration is projected to be high single digits to low double digits in 2027.

“We could still see that, but we also could see it flatten out a little bit in 2027. Obviously, we'll have sales orders come in at the end of this year, fourth quarter. Our order book is on pace with -- well, it's actually ahead of the market a little bit at this point in time.”

asked by Vincent Andrews · answered by Charles Magro

What is Luke Kissam most excited about regarding Corteva's market, narrative, R&D pipeline, new products, and margin opportunities?

Luke Kissam highlighted the strength of Corteva's people, the diversity and differentiated nature of its portfolio (2/3 differentiated technology), the ability to blend natural and synthetic solutions, and a strong R&D pipeline with 7 new actives coming in the next decade.

“I can't emphasize how strong I think our pipeline is. It's the best crop protection pipeline in the business with 7 new actives coming into that market over the next decade.”

asked by Christopher Parkinson · answered by Luther Kissam

Given the current year's $4.2 billion-$4.3 billion EBITDA guidance, is the company still targeting $4.4 billion EBITDA for 2027, implying mid-single-digit growth?

Management confirmed they are comfortable with the $4.4 billion EBITDA target for 2027, noting they are slightly ahead of the original plan for 2026, driven by licensing and new Crop Protection products. Dyssynergies are largely offset.

“I'd say we're a little ahead of our original plan in 2026. And if you look at the growth, what pleases me the most is where it's coming from. It's the core parts of our business, right?”

asked by Joel Jackson · answered by Charles Magro

Can management unpack the underlying sales trends for herbicides, insecticides, and fungicides, and comment on the expected trajectory for H2?

The Crop Protection market is recovering with low single-digit growth expected for 2026, primarily volume-driven with low single-digit pricing decline. Competitive pressure is higher in Brazil. New products are performing well with flat pricing and high single-digit volume growth. Some older AIs coming off patent lead to price adjustments to maintain share and margin.

“We probably have a bit more competitive pressure in Brazil for lots of different reasons, but that market is, of course, well supplied. It's one of the markets that's growing. So there's a focus area there.”

asked by Matthew Hettwer · answered by Charles Magro

How should investors think about the price vs. volume split in the Seed business for H2, given the focus on organic volume growth, and will KPIs transition to a combined organic view?

The Seed business is primarily a first-half business, with H2 largely dependent on Brazil. H2 volume is expected to be relatively flat due to less expansion of planted area. Price/mix is driven by new products. For H2, the split between volume and price is expected to be about 50-50, with slight gains in both.

“When you look at what we projected for the second half, the difference between volume and price, it's about 50-50. So we are seeing a slight gain in price and a slight gain in volume over the back half of the year.”

asked by Kristen Owen · answered by David Johnson

Why is the second half EBITDA balance much more Q4-weighted, with a projected $190 million loss in Q3 and $690 million growth in Q4, and what are the risks?

The second half is a small portion of full-year earnings (12-13%). The Q3 loss is typical, similar to 2024, due to seasonal patterns and some dyssynergies weighted to Q3. The overall H2 EBITDA is expected to be flat year-over-year against a strong H2 2025.

“When you look at where we're seeing the year-over-year changes, we do have some unfavorable price and costs built into the second half. Unfavorable costs, mainly that residual dyssynergy number that we talked about, the $25 million, a little bit due to logistics and freight costs.”

asked by Lucas Beaumont · answered by Charles Magro

Where do the big advantages for incremental productivity savings and lower input costs lie for Vylor and New Corteva post-separation?

The separation will offer both companies new opportunities for cost and productivity work. The reduced dyssynergy impact ($25 million vs. $100 million initially expected) is proof of effective cost management. Expect continuation of productivity benefits in both Seed and CP, with further details at Investor Day.

“We think that the separation is going to afford both companies with the opportunity to take our cost and productivity work to the next level.”

asked by Benjamin Theurer · answered by Charles Magro

Are the assumptions from the previous Investor Day for 2027 still valid, and are there any updates?

The agricultural backdrop remains largely as expected, with strong global demand and slightly higher crop prices. Internally, the company is performing better than expected, with licensing ahead of plan and new products well-received. The overall operating environment is consistent with original 2027 plans.

“Internally, I think we're performing better than that. David said, we're a little ahead on cost and productivity. I already mentioned, we're a little ahead in licensing. And our new products are really being well received in the marketplace.”

asked by Arun Viswanathan · answered by Charles Magro

Is the high single-digit price decline in Latin America the new normal, or is moderation expected next year?

High single-digit pricing pressure is not the new normal. Brazil is a growing but well-supplied market. Corteva's strategy involves adjusting prices for off-patent AIs while maintaining margins and share, and new products like Haviza will command premiums. No price recovery is expected in Brazil for 2026, but the company remains competitive.

“I actually think that when you start thinking about -- when you look at our Crop Protection pricing, but you look at our margins, that's the full story that you have to consider here because this is going to be part of the playbook.”

asked by Edlain Rodriguez · answered by Charles Magro