In the first quarter, BASF BAS continued to rely on its diversified product mix in what has been a challenging market environment for chemical producers. BASF’s agriculture and oil and gas businesses propped up sales in the first quarter, as revenues increased 4.8% year over year. On a geographic basis, management noted that growth in China was below the firm’s expectations during the quarter. Excluding special items, EBIT advanced 10% compared with the first quarter of 2012.

Similar to its peers, BASF saw strong results in its agriculture segment, with farmers around the globe planting large crops this year to return global supplies to a more normal level after periods of bad weather. Agricultural solutions sales were up 17% year over year, and EBIT before special items increased 19%. BASF’s agriculture business is heavily weighted toward crop protection products, but the company is trying to increase its presence in biotechnology seeds through collaboration efforts with Monsanto MON among others. We consider Monsanto the technology leader in genetically modified seeds and the best available collaboration partner.

Despite lower crude prices, oil and gas sales were up considerably in the quarter on higher volumes, but BASF saw its segment-adjusted EBIT decline compared with the prior-year period owing to weaker margins in natural gas trading. The firm’s more traditional chemical markets remained challenged, highlighted by the recent announcement that the company will restructure its plastic additives, pigments, and resins business units in Europe. Looking ahead, management confirmed its outlook for 2013, with an aim to exceed 2012 levels in sales and EBIT before special items.