DowDuPont cut its vaticinate for first-quarter sales on Thursday, citing the impact of U.S. Midwest floods on its agri business as well as weakness in its packaging and specialty plastics group.
Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and discrete other states, idling ethanol plants, slowing rail shipments of agricultural products and swamping storage bins coop up grain from previous harvests.
The company said the floods have limited its ability to deliver products to blokes, while delaying pre-season applications.
Sales from its agri business are expected to be down 4 percent to 6 percent and functioning earnings before interest, tax, depreciation and amortization (EBITDA) are expected to be down by $125 million to $150 million, DowDupont demanded.
Grains trader Archer Daniels Midland was also forced to lower its first-quarter profit forecast on Monday due to overflows and a severe winter.
For the first quarter, DowDupont now expects net sales to be down in the high single-digit percentage range. It had in days of yore forecast sales to fall in the mid single-digit percentage range.
DowDupont also forecast a $100 million reduction in its materials branch division’s operating EBITDA, compared with previous expectations, due to lower margins in packaging and specialty plastics globally.