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7-Business: Monsanto quarterly earnings rise on seed sales



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TITLE:  Monsanto Quarterly Earnings Rise on Seed Sales
SOURCE: Reuters, by Carey Gillam
DATE:   7 Apr 2005

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Monsanto Quarterly Earnings Rise on Seed Sales

KANSAS CITY, Missouri - Monsanto Co. said on Wednesday that second-
quarter earnings more than doubled on strong sales of seeds and gene
technology amid an active US spring planting season.

The gains were tied both to price increases for Monsanto's genetically
modified corn and soybean technology as well as an increased share of US
corn acreage.

"The US seeds and traits business is performing very well," said Monsanto
chief financial officer Terry Crews in a conference call with analysts
and media.

The company, whose shares were up about 1 percent, said profit rose to
$373 million, or $1.37 a share, for the quarter ended in February, from
$154 million, or 57 cents a share a year earlier. Analysts, on average,
expected the company to earn $1.32 a share, according to Reuters Estimates.

Monsanto said results were boosted by a 35 percent jump in revenue from
its seeds and gene technology business, which makes plants resistant to
herbicide and insects. Monsanto also saw a 17 percent gain in sales in
its agricultural productivity segment, which includes branded Roundup
herbicides and other glyphosate-based herbicide products.

Overall, net sales increased 27 percent to $1.9 billion in the second quarter.

"The bottom line message is their seeds and their genomics business is
doing very well," said Fulcrum Global Partners analyst Frank Mitsch.
"They are making greater penetration in corn and cotton and you're seeing
more stacked traits. The year is going quite well for them."

The results included after-tax restructuring charges of $6 million, or 2
cents per share, and income on discontinued operations of $2 million, or
1 cent per share, associated with the planned sale of the company's
environmental technologies businesses.

Expenses were slightly higher at $127 million for the quarter, in part
because of Monsanto's expansion of its seeds business.

The company bought the North American canola seed businesses of Advanta
Seeds last year, as well as Channel Bio Corp., which is now part of
Monsanto's American Seeds Inc. subsidiary. The company also recently
bought Emergent Genetics Inc. to bolster its presence in the cotton market.

Monsanto has particular strength in the soybean market, with market share
estimated at more than 80 percent of US soybean acreage.

The company's revenue was once largely dependent on its agricultural
herbicide sales, but Monsanto has been shifting its focus to sales of
seeds and development of genetic modifications for crops because of
increased competition in herbicide market.

The company reiterated its forecast given last week that pegged profit
for the year at between $2.00 and $2.05 on an ongoing basis. Crews cited
strength in the United States as well as opportunities in Latin America
and better-than-expected performance in Europe, Africa and Asia.

But Crews warned that Monsanto was facing many unknowns, including
potential liability related to the bankruptcy of former affiliate Solutia
Inc., and ongoing uncertainty about the company's ability to collect fees
for biotech soybean seeds in some Latin American markets.

Monsanto shares were up about 1 percent at $61.99 on the New York Stock
Exchange, after surging as high as $63.85 early in the session.




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