Monsanto profit falls, but less sharply than Wall St expected
by Carey Gillam
Monsanto Co on Wednesday reported a 34 percent drop in quarterly profit, in part because of lower planted corn acreage in South America and a shift in timing of some sales, but the decline was less steep than analysts expected.
Shares of the world's largest seed company, which is known for its genetically engineered corn, soybeans and other crops as well as the popular Roundup herbicide, rose nearly 2 percent.
Net sales fell to $2.9 billion in the first quarter ended Nov. 30 from $3.1 billion a year earlier, hurt by a 12 percent decline for corn seeds and genetic traits to $928 million.
Sales of soybean seed and trait products, however, surged 48 percent to $396 million.
One key new product is the company's "Intacta RR2 PRO," a new soybean genetically engineered to fight off damaging worms and marketed to South American farmers.
New soybean products will be a core factor for profit growth this fiscal year, the company said, as corn acres in the United States and globally are seen dropping. The company's early order book and prepayments for spring planting in the United States point to strong soybean demand, Monsanto said.
Due in part to expectations for reduced planting of corn in U.S. fields this spring, Monsanto officials said second-quarter earnings were likely to drop 5 percent to 10 percent from a year earlier on an ongoing basis.
First-quarter earnings fell to $243 million, or 50 cents a share, from $368 million, or 69 cents a share, a year earlier. Some analysts had been expecting a drop of as much as 50 percent.
Excluding discontinued operations, earnings on an ongoing basis amounted to 47 cents a share. Analysts on average were expecting 34 cents, according to Thomson Reuters I/B/E/S.
Monsanto said it still expected earnings per share of $5.75 to $6.00 in fiscal 2015.
In an update on its progress on new products, Monsanto said it was advancing disease-resistant breeding traits along with new insect control products, and was upgrading and expanding its farm data services.
The company said it also was rapidly expanding its work into microbe strains that can enhance yields in key crops. Research in 2014 showed yield gains of 4 bushels per acre in corn and 2 bushels per acre in soybeans with certain strains, Monsanto said.
Monsanto shares were up 1.9 percent at $117.94 in midday trading.