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[genet-news] BUSINESS & SEEDS: Monsanto beats expectations, shares rise

                                  PART 1

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SOURCE: Reuters, India

AUTHOR: Carey Gillam


DATE:   02.04.2009

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* Profit excl. items $2.16/shr vs. expectation of $2.07

* Net income falls 3 percent.

* Full-year profit outlook unchanged

* Quarterly sales rose 8 percent to $4 billion

* Stock up more than 2 percent.

KANSAS CITY, Mo., April 2 (Reuters) - Monsanto Co, the world?s biggest seed company, posted better-than-expected profit on Thursday as revenues grew in its key corn and soybean seed businesses and it benefited from a low tax rate.

Monsanto, a leader in the development of genetically altered crops, said net income was $1.092 billion, or $1.97 a share for the second quarter, which ended Feb. 28, down from $1.129 billion, or $2.02 a share a year ago, due in part to a slide in its herbicide business.

Excluding items, earnings rose to $2.16 a share from $1.77. Analysts on average were expecting $2.07.

Soleil Securities analyst Mark Gulley said the results were helped by several variables, including a low tax rate, but pure fundamentals were strong.

?Corn and soy remain the foundation of the company, and that continues to do well,? said Gulley, who has a buy rating on the shares, which were up 2.2 percent before the market opened.

Monsanto said the second quarter saw revenue jump both in its U.S. branded corn seed and traits business and in its U.S. soybean seed and traits business, while fewer planted acres for corn in Brazil was noted because of drought conditions.

Seed and genomics sales were $3 billion for the second quarter, up 20 percent from a year earlier. At the same time, sales of Roundup and other herbicides dropped 21 percent.

Company officials said last year, U.S. volume of the Roundup herbicide was up in the second quarter ahead of an anticipated price increase, but this year sales returned to more historical patterns.

Overall, St. Louis-based Monsanto reported record net sales of $4 billion for the second quarter, up 8 percent from a year earlier.

Monsanto said its results were impacted by $162 million, or 19 cents per share, in charges attributable to in-process research and development tied to the acquisitions of a sugarcane breeding and technology company in Brazil.

The company said its full-year earnings should be in the range of $4.23 to $4.33 per share on a reported basis and in the range of $4.40 to $4.50 per share on an ongoing basis. Analysts are looking for $4.72 a share. (Reporting by Carey Gillam)

                                  PART 2

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SOURCE: Bloomberg, USA

AUTHOR: Jack Kaskey


DATE:   02.04.2009

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April 2 (Bloomberg) -- Monsanto Co., the world?s largest seed producer, reported second-quarter profit that topped analysts? estimates as U.S. farmers increased purchases of genetically modified corn seeds.

Profit excluding an acquisition-related cost in the three months through February was $2.16 a share, St. Louis-based Monsanto said today in a statement. Analysts expected $2.07 a share, the average of 12 estimates in a Bloomberg survey. A year earlier, earnings excluding one-time items were $1.77.

Chief Executive Officer Hugh Grant raised prices for genetically modified seeds and Roundup weed killer, betting farmers would pay a premium for increased output even as crop prices decline. Net income slid 3.3 percent to $1.09 billion, or $1.97 a share, because of the acquisition cost and declining sales of Roundup. Total sales gained 8.3 percent to $4.04 billion.

?You are looking at a company that is still growing 20 percent a year in this market,? Russell Croft, who helps manage $550 million, including Monsanto shares, as a vice president at Croft-Leominster Inc., said by telephone from Baltimore. ?The quarter looks pretty good.?

Monsanto fell 27 cents to $81.47 at 10:10 a.m. in New York Stock Exchange composite trading. The shares gained 16 percent this year through yesterday.

2009 Forecast

Monsanto repeated its Jan. 7 forecast for full-year profit of $4.40 to $4.50 a share. The average estimate of 12 analysts in the survey was $4.70, and the company earned $3.62 last year.

The lack of an improved outlook shouldn?t be viewed as a big concern because the company has a history of issuing conservative earnings forecasts, Croft said.

?Monsanto implicitly lowered the outlook for the back half of the year,? Laurence Alexander, a New York-based analyst at Jefferies & Co., said in a report today. He rates the shares ?buy.?

Gross profit from seeds, including engineered varieties and genetics licensed to competitors, rose 21 percent in the quarter to $1.98 billion, Monsanto said. Revenue in the unit gained 20 percent to $3.04 billion as increased U.S. sales of corn and soybean seeds more than made up for reduced plantings in Brazil because of a drought, the company said.

?Corn and soybean profits were stronger than expected,? Alexander said.

Corn futures have declined 50 percent since a June peak, and soybeans have dropped more than 40 percent from a record in July.

Pretax Charge

Seed results were also hurt by a pretax charge of $42 million to pay South African farmers who experienced ?variable pollination? with three types of corn, the company said.

Gross profit from crop chemicals dropped 5.7 percent to $544 million as sales declined 16 percent largely because customers a year earlier increased Roundup purchases ahead of an announced price increase, Monsanto said.

Grant has said he plans to double Monsanto?s gross profit in the five years ending in 2012 as global demand rises for genetically modified seeds that boost yields of corn, soybeans and cotton.

Monsanto had 36 percent of U.S. corn-seed sales last year and 29 percent of soybean sales, topping DuPont Co., which had 29 percent and 24 percent, respectively, according to UBS AG.

Combined plantings of corn, soybean and wheat will drop 2.3 percent this year as farmers cut costs, the U.S. Department of Agriculture said this week. Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, followed by soybeans, valued at $27.4 billion. The U.S. is the biggest producer of both crops.

                                  PART 3

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SOURCE: The Associated Press, USA

AUTHOR: Christopher Leonard


DATE:   02.04.2009

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ST. LOUIS (AP) ? Monsanto Co., the world?s biggest seed maker, said Thursday its fiscal second-quarter profit edged down 3.2 percent even as corn and soybean sales rose sharply.

The results appeared to handily beat analysts? estimates and its shares rose 4 percent in morning trading.

The St. Louis-based company earned $1.09 billion, or $1.97 per share, in the three months ended Feb. 28, down from $1.13 billion, or $2.02 per share, a year ago.

Monsanto says it earned $2.16 per share excluding one-time income taxes the company does not consider part of ongoing operations.

Thomson Reuters said analysts expected a loss of 3 cents a share.

Monsanto?s revenue jumped 8.3 percent to a record $4.04 billion from $3.72 billion a year ago with a boost from sales of genetically engineered seed.

Its shares rose $3.26 to $85 in morning trading Thursday.

Monsanto bases its fiscal year on the agricultural calendar, and the second quarter is a time when U.S. farmers start placing their orders for the coming spring planting season. Analysts keep a close on Monsanto?s seed orders as the company tries to steal market share from other biotech firms like Pioneer Hi-Bred, a DuPont Co. subsidiary.

Monsanto reported a 19 percent jump in corn seed sales for the quarter, and a 35 percent jump in soybean sales. Overall, revenue from genetic traits ? which the company licenses out to other firms ? and seed sales was up 20 percent.

Chief Executive Hugh grant said the results show Monsanto is executing its strategy of boosting profits by developing new traits for staple crops like corn and soybeans amid a growing global demand for food and crop-based fuels.

?Through the first half of the year, we?ve done what we had committed to do: We?ve preserved value across the portfolio, which has allowed us to lift gross profit by 25 percent, margins by 5 percent, and ongoing earnings by 41 percent,? Grant said in a statement.



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