It’s one of those days where the major averages are showing some decent-size divergences. While we’d normally blame Apple (AAPL) for the differences, today’s can be chalked up to EI du Pont de Nemours (DD), which has plunged after lowering its earnings guidance.
Bloomberg du Pont has dropped 4% to $65.01, by far the largest loser in the Dow Jones Industrial Average, which has declined 0.2% today. The S&P 500, however, is down just 0.05%, while the Nasdaq Composite, which has no exposure to du Pont has gained 0.2%.
du Pont said it would earn between $4 and $4.10 in 2014, down from its previous guidance of $4.20 to $4.45, and blamed its corn seeds for much of the miss. Barclays’ Duffy Fischer and team explain what happened:
In Ag, we now expect profitability to be down modestly from last year, and down 12% for Q2. Much of the decline is due to the weaker corn seed (mostly volume but some price weakness). Soybeans are up, on increased planted acres, but this was an unlucky year for DuPont to have the market switch from corn to soy. Dupont is rolling its portfolio from Y-series to T-series germplasm and just introducing RR2 for RR1 so its soy seed lineup is relatively less competitive this year than any year in the last five. Other Detail: Crop protection volumes in the U.S. have also been impacted by a wet spring, a delayed and compressed application season and distributor destocking.
du Pont isn’t the only agricultural-exposed chemical company dropping today. Monsanto (MON) has declined 1% to $124.98, while FMC Corp (FMC) is off 0.8% at $70.45.
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