Corteva Earnings: Solid Seeds Results Slightly Offset by Weak Crop Protection Profits

Corteva's second-quarter results highlighted the near-term dichotomy between the company's seed and crop protection business. Seeds, which we view as the most stable crop input, generated 16% operating EBITDA growth and 500 basis points of margin expansion versus the prior-year quarter, driven by higher prices and lower royalty expenses. This is in line with our thesis that Corteva's differentiated seed portfolio, which underpins our wide moat rating, will drive solid profit growth and margin expansion from the commercialization of new products and reduction of net royalties.