(Reuters) - Dow Chemical Co’s DOW.N adjusted profit handily beat analysts’ estimate as margins in its agricultural sciences business soared, helped largely by new crop protection products.
Shares of the company, the biggest U.S. chemical maker by sales, rose about 2 percent to $43.94 in early trading.
The company’s profit beat comes despite flat sales due to a stronger dollar.
A stronger dollar hurts about 30-35 percent of Dow’s revenue and one-tenths of profit, Chief Executive Andrew Liveris told Reuters.
Rival DuPont DD.N forecast lower-than-expected revenue and profit on Tuesday, citing the strengthening dollar. The dollar .DXY surged nearly 13 percent in 2014, its biggest yearly gain since 1997.
Dow continues to see strong demand for its products amid weak oil prices and the strengthening dollar, Liveris said.
The company’s farm sales were boosted by strong demand for its insecticides in the quarter ended Dec. 31, contrasting weak agriculture sales at Monsanto Co (MON.N) and DuPont, which were hurt by a fall in corn plantings.
Dow’s sales of new crop protection products jumped 23 percent in the fourth quarter, led by Spinetoram and Isoclast insecticides.
“Even though corn prices are down and even though there is a rotation from corn to soy ... no one has told the bugs that,” said Liveris.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) at the agriculture business rose 40 percent to $222 million.
Dow, which has been focusing on more profitable businesses such as packaging, electronics and agriculture, plans to raise $7.5 billion to $8 billion from asset sales by mid-2016.
Adjusted EBITDA at the company’s performance plastics business, its biggest by sales, rose 6 percent in the quarter.
The business has gained from the U.S. shale gas boom that has reduced prices of raw materials such as ethane and propane.
But with the 60-percent slump in global crude prices, Dow is now cracking propane in both Europe and United States, Liveris said.
“We have flexibility, which is really what helps us make more money even in a low oil price.”
Dow averted a proxy fight with activist investor Dan Loeb last November by agreeing to add four independent directors to its board. Loeb wants Dow to spin off its petrochemical business.
Dow’s adjusted profit was 85 cents per share, well ahead of the average analyst estimate of 69 cents per share, according to Thomson Reuters I/B/E/S.
Reporting By Swetha Gopinath and Kanika Sikka in Bengaluru; Editing by Sriraj Kalluvila