Monsanto Profit Tops Analyst Estimates on Latin America Seeds
January 05, 2012, 12:31 PM ESTBy Jack Kaskey
Jan. 5 (Bloomberg) -- Monsanto Co., the world’s largest seed company, reported fiscal first-quarter profit that exceeded analysts’ estimates as sales rose in Latin America.
Net income climbed to $126 million, or 23 cents a share, in the three months through November, from $9 million, or 2 cents, a year earlier, St. Louis-based Monsanto said today in a statement. Monsanto said last month that earnings would be 15 cents to 20 cents a share, and the average of 10 estimates compiled by Bloomberg was for profit of 18 cents.
Full fiscal-year earnings will be $3.39 to $3.44 a share, Monsanto said, compared with a December forecast of $3.34 to $3.44. The average estimate of 13 analysts in the survey was for profit of $3.44 a share. The company also maintained its full- year cash-flow guidance of $1.3 billion to $1.5 billion.
First-quarter revenue rose 33 percent to $2.44 billion from $1.84 billion as farmers in the southern hemisphere bought more genetically modified corn seed. Chief Executive Officer Hugh Grant is increasing sales in Argentina and Brazil, the drivers of first-quarter earnings, where he plans to introduce the first insect-killing soybean seeds.
“The strength in the quarter was driven by a sharp increase in biotech seeds and traits in the Brazil and Argentina markets,” Michael E. Cox, a New York-based analyst at Piper Jaffray Cos. who rates the shares “overweight,” said in a note yesterday. “Farmers are quickly upgrading to advanced seed technology to bolster yields and combat insect pressure.”
Results in Monsanto’s first and fourth quarters are typically weakest because farmers in North America and Europe, where the company generates more than half its revenue, are between planting seasons.
(Monsanto scheduled a conference call for 9:30 a.m. New York time accessible at LIVE <GO>, by telephone at +1-877-869-3847, and at www.monsanto.com/investors.)
--Editors: Steven Frank, Simon Casey
To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net.
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.
