Syngenta AG (SYNN), the world’s largest crop-chemical company, increased prices more than expected in the first quarter, helping prop up sales.
Sales increased 7 percent to $4.3 billion, after currency adjustments, the Basel, Switzerland-based company said in a release. Analysts in a Bloomberg survey expected $4.33 billion, according to a mean estimate. Syngenta shares fell in Zurich trading.
Syngenta, like seeds-competitor Monsanto Co. (MON), benefited from a warm start to the spring in the U.S. that led farmers to bring forward orders for seeds and crop-protection. Chief Executive Officer Michael Mack said there “will be some effect” as sales that are normally booked later in the year get pulled into the first quarter.
“Pricing was good but sales volume was a little bit short,” said Bettina Edmondston, an analyst at Kepler Capital Markets in Zurich. “Going into today everybody was expecting strong results, which was reflected in the share-price movement.”
Shares of the maker of Axial herbicide and Cruiser seed care fell 2.7 percent to 314.8 Swiss francs as of 9:42 a.m.
The target for increasing prices for the full year still remains 2 to 3 percent, Chief Financial Officer John Ramsay said in an interview. They gained 4 percent in the first quarter.
Syngenta claims the No. 3 spot in seed production with a 9 percent market share. It’s on track to add 0.5 of a percentage point growth this year, the executives said.
The company generated $1.5 billion in free cash last year, two-thirds of which was returned to shareholders through share buybacks and dividends.
With no indication that DuPont Co. (DD), Dow Chemical Co. (DOW) and Bayer AG (BAYN) are seeking to offload their rival seed operations, Syngenta is looking at acquisitions of between $100 and $600 million, Ramsay said.
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