Monsanto again nudged higher its earnings hopes, as the
agrichemicals giant, facing a takeover by Bayer, reported better-than-expected
profits, fuelled by rising herbicide prices and the popularity among farmers of
The US-based group, which expects later this year to
complete its $66bn purchase by Bayer, said that it expected to report earnings
per share for the year to the end of August "at the high end" of a range of
That compares with a forecast in April of earnings per share
coming in at the high end of a range of $3.95-4.44.
That itself was an upgrade from previous guidance of earnings
reaching $3.83-4.35 per share.
Monsanto's shift came as the group unveiled a rise of 17.6%
to $843m in earnings for the March-to-May quarter, on revenues up 1.0% at $4.23bn.
That was equivalent to $1.90 per share, excluding one-off
items, ahead of the $1.76-per-share figure that investors had expected.
The growth reflected a 12.1% rise to $371m in gross profits
from the agricultural productivity division, which sells herbicides such as
Roundup, and where Monsanto flagged "improvements in pricing and volumes for
glyphosate-based herbicides and continued sales of XtendiMax dicamba-based
In the core seeds and genomics business, gross profits
actually eased by 1.7% to $2.02bn, reflected in part one-off effects, but also
the switch by farmers away from corn, profits from which dropped 5.4% to $922m,
and a dent in alfalfa, where Monsanto did not receive licence fees gained a
'Strong soy demand'
However, gross profits in soybeans soared 50% to $588m, as
US farmers sowed 20m acres with Roundup Ready 2 Xtend alone, a seed genetically
modified to be tolerant to both dicamba and glyphosate herbicides, allowing
farmers to spray off weeds in their crops.
The comments come ahead of US Department of Agriculture data
on Friday which are expected to show US growers planting a record soybean area
this spring, largely at the expense of corn, for which low prices have made it
a less attractive option.
In South America, sowings with Intacta RR2 pro seed "now
exceeds 50m acres."
"In soybeans, Monsanto has seen strong demand for the latest
technologies," the group said
Hugh Grant, the Monsanto chairman and chief executive, said
that for the group overall "our innovation leadership and commitment to our
grower customers is driving our growth.
"I'm very pleased with what our teams have accomplished
this year, balancing meaningful progress on both delivering the business and
working to close the deal with Bayer."
At the UK's Warwick Business School, international business professor John Colley said: "Third quarter earnings figures for Monsanto continue the recent improving trend as US agribusiness markets continue to grow."
Monsanto shares stood 0.9% higher at $118.26 in morning deals
in New York, earlier touching a two-year high of $118.47.