Investors shrugged off Monsanto's admission that it is to restate accounts amid an official probe, and lifted shares in the seeds group, after it unveiled better-than-expected results and targeted huge acreage increases.
The US-based champion of genetically modified seed said that following internal investigations, set up after US watchdogs launched a inquiry into customer incentives, it would restate financial data from the mid-2009 to the March-to-May quarter this year, spread over three financial years.
However, Monsanto said that its total revenues and costs over the period remained "unchanged" by the revisions, and estimated that any impact on earnings would prove small, well under $0.10 a share overall.
The group also unveiled an after-tax loss of $112m for the June-to-August period, the last quarter of its fiscal year, equivalent to $0.21 a share, and lower than the $0.27-a-share loss that Wall Street had expected. Group sales, at $2.2bn, beat the $1.89bn that analysts had pencilled in.
And it forecast earnings of $3.34-3.44 a share in the newly-begun year, including a $0.10-0.15-a-share result in the current quarter, better than analysts have pencilled in.
Monsanto shares closed 5.2% higher at $65.25 in New York.
South America boost
The group attributed its better-than-expected performance in the June-to-August period, a seasonally weak quarter, to a "strong contribution" from Latin America, where corn sales have proved particularly buoyant.
And the region is set to be the "largest source of new growth" in the current financial year too, "driven by the ramp up of the corn opportunity in Brazil and Argentina", where newly-started sowings of the grain are widely expected to show strong growth.
Furthermore, the countries are dealing rapidly with new genetically modified products too, helping Monsanto forecast a jump of up to 85% next year, to 22m-24m acres, in world sowings of its cutting-edge Reduced Refuge family of biotech corn seed.
Seedings with its flagship Roundup Ready 2 Yield soybean seed will soar by up to roughly 75%, to 27m-30m acres.
The greater focus on Latin America will provide a "structural change" to the cycle of Monsanto's results, boosting profits in the September-to-November quarter, which is also typically a weak period for the group, finance director Pierre Courduroux told investors.
The group's estimate of earnings per share of $0.10-0.15 for the quarter compared with a Wall Street consensus of just under $0.08 a share.
Seeds leads
Monsanto's operating profits from seeds, its biggest division, soared 51% to $790m in the latest quarter, on revenues up 39% at $1.35bn.
Profits on corn doubled to $340m, with those on soybeans edging 4.5% higher to $92m.
The smaller agricultural productivity division, which sells products such as Roundup weedkiller, achieved a profit of $181m, on sales of $896m.
The Securities and Exchange Commission probe centres on cash Monsanto paid to win Roundup sales, at a time of heightened competition in the sector thanks to a flood of supplies from Chinese manufacturers of generic alternatives.
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