("Monsanto 2Q Net Rises 3.3% On Strong Seeds, Genomics
Business," published at 8:33 a.m., EDT, incorrectly stated that the
company had a year-earlier charge. The corrected version
follows)
DOW JONES NEWSWIRES
Monsanto Co.'s (MON) said Thursday that its fiscal
second-quarter net income fell 3.3% on charges related to
in-process research and development despite increased sales.
Many farmers have opted to delay buying fertilizer ahead of the
planting season, leaving sellers stuck with highly priced inventory
produced during last year's boom. Analysts and investors will be
watching Monsanto's results closely to get an idea of demand for
seeds.
The world's largest seed supplier in terms of revenue has said
it expects the second and third quarters to be the primary drivers
for full-year results since they reflect the relative size of its
U.S. business, which is planting during those periods, and the
importance of its seeds-and-traits business.
Monsanto's shares were up 1.4% at $82.90 in premarket trading.
The stock is up 16% so far this year through Wednesday's close,
outperforming the broader stock market.
Chief Executive Hugh Grant said Thursday the company remains on
track for earnings to grow more than 20% for the fiscal year.
For the period ended Feb. 28, Monsanto posted net income of
$1.09 billion, or $1.97 a share, down from $1.13 billion, or $2.02
a share, a year earlier. The latest results included 19 cents in
charges related to in-process research and development, while last
year's included a 25-cent gain related to a claim settlement and
discontinued operations. Excluding items, earnings rose to $2.16
from $1.77.
In February, the company reiterated its expectations for
earnings of $1.97 and $2.01, which was still below analysts'
estimates at the time.
Revenue increased 8.3% to $4.04 billion, driven by increased
sales from the U.S. corn and soybean seeds and traits businesses,
partly offset by a drop in sales of its Roundup brand of
herbicides.
Analysts polled by Thomson Reuters expected earnings of $2.06
and revenue of $4.14 billion.
Gross margin rose to 62.5% from 59.3%.
Sales in the seeds and genomics segment - which includes the
company's global seeds and traits business and genetic-technology
platforms, increased 19% to $3.04 billion on the increased U.S.
sales of corn and soybean seed and traits as well as the continued
adoption of its higher-margin triple-stack corn technology.
Revenue from Monsanto's agricultural-productivity products -
including the company's Roundup lawn and garden herbicide as well
as crop-protection, herbicide and animal-agriculture products -
fell 16% to $993 million.
The company affirmed its fiscal-year outlook for earnings of
$4.40 to $4.50. Analysts expected $4.69 on revenue of $13.1
billion.
Monsanto posted a small victory in February, when France's food
watchdog said it had concluded the company's genetically modified
corn is safe, contradicting an earlier report that led to a ban on
the corn. The report angered environmentalists and embarrassed
French President Nicolas Sarkozy's government, which had resorted
to a special European Union measure to outlaw the crops.
The company boosted its quarterly dividend by 10% in January, a
sharp contrast to most companies across all segments, who have been
cutting payouts to save cash.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com