GENET archive

[Index][Thread]

BUSINESS & SEEDS: Monsanto raises forecast as net gains 77% on herbicide sales



                                  PART 1


------------------------------- GENET-news -------------------------------

TITLE:   MONSANTO RAISES FORECAST AS NET GAINS 77% ON HERBICIDE SALES

SOURCE:  Business Week, USA

AUTHOR:  Bloomberg, USA, by Jack Kaskey

URL:     http://www.businessweek.com/news/2011-06-29/monsanto-raises-forecast-as-net-gains-77-on-herbicide-sales.html

DATE:    29.06.2011

SUMMARY: "Monsanto Co., the world?s largest seed company, raised its full-year profit forecast and posted third-quarter earnings that topped analysts? estimates on higher sales of Roundup weed killer and genetically modified seeds. Net income climbed 77 percent to $680 million, or $1.26 a share, in the three months through May 31, from $384 million, or 70 cents, a year earlier, St. Louis-based Monsanto said today in a statement. That beat the $1.10 average estimate of 17 analysts in a Bloomberg survey."

----- archive: http://www.genet-info.org/information-services.html -----


MONSANTO RAISES FORECAST AS NET GAINS 77% ON HERBICIDE SALES

June 29 (Bloomberg) -- Monsanto Co., the world?s largest seed company, raised its full-year profit forecast and posted third-quarter earnings that topped analysts? estimates on higher sales of Roundup weed killer and genetically modified seeds.

Net income climbed 77 percent to $680 million, or $1.26 a share, in the three months through May 31, from $384 million, or 70 cents, a year earlier, St. Louis-based Monsanto said today in a statement. That beat the $1.10 average estimate of 17 analysts in a Bloomberg survey.

Profit excluding some items will rise to $2.84 to $2.88 a share in the fiscal year through August, compared with a previous prediction of $2.72 to $2.82. The average estimate of 20 analysts surveyed by Bloomberg was $2.82. Monsanto also said the Securities and Exchange Commission is investigating customer incentives for Roundup.

Roundup, the world?s best-selling herbicide, and other crop chemicals returned to profit after a $175 million loss before interest and tax in the year-ago quarter. Gross profit from seeds and genetics rose 21 percent after Chief Executive Officer Hugh Grant cut prices of new corn and soybean seeds in an effort to stop gains by DuPont Co.?s Pioneer unit.

?Soybeans had better sales and gross profit than expected, which was probably the most upside in seeds,? Chris Shaw, a New York-based analyst at Monness Crespi Hardt & Co. who rates the shares ?neutral,? said in an interview. ?It will be interesting to see whether the market rewards them for better Roundup earnings or discounts that as a bonus.?

SEC Probe

Monsanto rose $2.30, or 3.4 percent, to $69.20 as of 9:35 a.m. in New York Stock Exchange composite trading. The shares declined 3.9 percent this year before today.

Monsanto said the SEC probe involves customer-incentive programs relating to glyphosate products, the generic name for Roundup, in fiscal years 2009 and 2010. Monsanto said it received a subpoena for documents and is cooperating. John Nester, a SEC spokesman, declined to comment.

The company planned to spend as much as $150 million ?of incremental price concessions or trade incentives? in the Roundup business to establish the brand in Latin America, North America and Europe, Carl M. Casale, Monsanto?s former chief financial officer, said in a February 2010 conference call.

Sales in the fiscal third quarter rose 21 percent to $3.59 billion, as crop chemicals such as Roundup gained 57 percent and seeds and gene license fees climbed 12 percent.

Fourth Quarter

Monsanto?s loss in the fourth-quarter, traditionally a money-losing period because of crop-planting seasonality, will be 26 cents to 30 cents a share, the company said in a presentation posted on its website. The average estimate of 16 analysts surveyed was for a loss of 18 cents.

Roundup Ready 2 soybeans and reduced refuge corn, Monsanto?s newest modified seeds, will meet forecasts for planting on mid-teens millions of acres in the U.S. this year, the company said.

High crop prices are generating record income for U.S. farmers, according to U.S. Department of Agriculture data. That typically helps boost demand for pricier seeds that Monsanto engineers to kill pests and tolerate applications of weed killer.

DuPont last year tied Monsanto for the lead in North American corn-seed market share, and the Wilmington, Delaware- based company said on June 14 that it gained more share this year in corn and soybeans.

--With assistance from Joshua Gallu in Washington. Editors: Simon Casey, Steven Frank.



                                  PART 2

------------------------------- GENET-news -------------------------------

TITLE:   MONSANTO POSTS USD680 MILLION PROFIT IN 3RD QUARTER

SOURCE:  The Associated Press, USA

AUTHOR:  

URL:     http://www.google.com/hostednews/ap/article/ALeqM5j4OZTdiJK35VRQM-oUYRxgKoYxdQ?docId=9e2ec33d56474500b4bbf0d3ab152ec8

DATE:    29.06.2011

SUMMARY: "Monsanto Co. says higher sales of genetically engineered seeds helped it boost is third-quarter profit 77 percent, as the company disclosed federal regulators have subpoenaed the company as part of an investigation into its herbicide business. Monsanto said the U.S. Securities and Exchange Commission is investigating customer incentives the company paid out for its Roundup herbicide business during fiscal years 2009 and 2010. Monsanto said it is cooperating with an SEC subpoena for documents related to the incentives."

----- archive: http://www.genet-info.org/information-services.html -----


MONSANTO POSTS USD680 MILLION PROFIT IN 3RD QUARTER

ST. LOUIS (AP) ? Monsanto Co. says higher sales of genetically engineered seeds helped it boost is third-quarter profit 77 percent, as the company disclosed federal regulators have subpoenaed the company as part of an investigation into its herbicide business.

Monsanto said the U.S. Securities and Exchange Commission is investigating customer incentives the company paid out for its Roundup herbicide business during fiscal years 2009 and 2010. Monsanto said it is cooperating with an SEC subpoena for documents related to the incentives.

During a conference call with investors, CEO Hugh Grant refused to elaborate on the investigation ?out of respect for the SEC and their process.? He declined to say what kind of incentives are under investigation, or what kind of regulatory action Monsanto might face, if any, saying only that the investigation was in its ?early days.?

Monsanto has been working for years to shift its business focus away from farm chemicals and into genetically altered seeds, and Grant said the third-quarter earnings show the strategy is working. Profits were boosted by rising sales of engineered corn and soybean seeds, as Monsanto convinced more farmers to buy pricier varieties with several engineered traits.

The St. Louis company reported Wednesday its net income rose to $680 million, or $1.26 per share, for the quarter ended May 31, compared with $384 million, or 70 cents a share, a year ago. It says revenue increased 21 percent to $3.59 billion.

The results widely beat expectations, with analysts surveyed by FactSet expecting net income of $1.10 per share on revenue of $3.4 billion. Shares of Monsanto rose $3.36, or 5 percent, to close at $70.26.

The unexpectedly high sales prompted Monsanto to raise its 2011 outlook for ongoing earnings per share to between $2.84 and $2.88, from the prior estimate between $2.72 and $2.82.

The fiscal third quarter is critical for Monsanto because it includes the spring months in which the company makes the bulk of its seed sales to farmers. Monsanto is locked in a competition for farmers? dollars with seed developers like Dupont, which owns the seed company Pioneer Hi-Bred. Monsanto is trying to convince farmers to pay a premium for seeds that include many genetically altered traits, rather than choose a cheaper version with just one or two traits.

Monsanto said its total seeds and traits revenue rose to $2.65 billion from $2.36 billion last year. Corn seed sales jumped 10 percent from last year to $1.12 billion. Soybean sales rose 10 percent to $605 million.

Monsanto said sales at its agricultural productivity segment, which produces Roundup, surged 57 percent to $943 million. The segment had been languishing in recent years in the face of cheaper, generic Roundup versions produced in China.

The rise in seed sales came from a mix of U.S. customers who traded up for more expensive brands, and from an increased market share in international markets in Latin America and Brazil. Monsanto said it is on track this year to boost the number of U.S. acres with top-of-the line engineered seeds to the ?mid-teens millions.? That would still be a relatively small share of the roughly 167 million acres of corn and soybeans expected to be planted this year.

Grant has said previously that it?s critical to get the more expensive seeds planted on farmers? acres so they can see the economic benefits of the crops, even if Monsanto has to discount its prices. Once the new lines of seeds get a foothold in the market, Monsanto will be able to charge more for them, Grant said. Shifting to new seed lines is important to Monsanto because the patent on its most popular trait, which makes plants resistant to the popular herbicide Roundup, is set to expire in 2014.

Monsanto can make more money off its newer, patented seeds, like ?Roundup Ready 2 Yield? seeds, which the company says are more productive. Grant said Wednesday that the third-quarter sales showed Monsanto?s strategy is working. As more farmers plant the new generation of crops, they are seeing the technology first hand, he said.

The number, type or even price of the new traits isn?t as important to farmers, who are more concerned with how much the seeds will boost their harvest, he said.

?I don?t think there is any one silver bullet, but you have to satisfy the farmer?s demand for driving yields? higher, Grant said.



                                  PART 3

------------------------------- GENET-news -------------------------------

TITLE:   MONSANTO CEO SEES RESCUE IN LATEST RESULTS

SOURCE:  The Street, USA

AUTHOR:  Scott Eden

URL:     http://www.thestreet.com/story/11169627/1/monsanto-ceo-grant-sees-rescue-in-latest-results.html

DATE:    29.06.2011

SUMMARY: "Monsanto shares were popping Wednesday morning after the company raised financial outlook and turned in better-than-expected quarterly financial results. The report also gave Monsanto boss Hugh Grant an opportunity to drive home some positive messaging as the company strives to rebound from a series of setbacks last year even as the rest of the agricultural industry saw surging business amid a boom in crop prices."

----- archive: http://www.genet-info.org/information-services.html -----


MONSANTO CEO SEES RESCUE IN LATEST RESULTS

NEW YORK (TheStreet) -- Monsanto shares were popping Wednesday morning after the company raised financial outlook and turned in better-than-expected quarterly financial results.

The report also gave Monsanto boss Hugh Grant an opportunity to drive home some positive messaging as the company strives to rebound from a series of setbacks last year even as the rest of the agricultural industry saw surging business amid a boom in crop prices.

In spring and summer 2010, after a rebellion among its farmer-customers forced the company to cut prices for its newest test-tube corn, the controversial producer of genetically modified crop seeds had to revoke the ambitious growth goals it had set for the next three years.

Its stock fell 20% in 2010 and is down about 4% so far in 2011. Grant, whose vision has guided the company?s long-range planning since he took over the top spot in 2003, faced a particularly humbling moment.

Now, however, his words seemed triumphant -- even in the prepared CEO remarks that always appear in corporate earnings press releases.

?We made significant changes to our business this year, and those changes resonated with our customers,? Grant said in the statement. ?We earned their business and achieved what we set out to achieve: unit volume growth in our core crops, a successful implementation of our agricultural productivity strategy and sustained cost-discipline across our operations.?

Even as Monsanto celebrated its third-quarter earnings, yet more trouble has alreadly bubbled up for the company. Buried in the press release announcing results Wednesday, Monsanto disclosed that the Securities and Exchange Commission had launched an investigation into its use of ?customer incentive programs? for its weedkiller products between 2009 and 2010.

The company said it has received a subpoena for documents in connection with the programs and that it is ?cooperating with the staff?s investigation.?

Monsanto has seen its share of regulatory trouble. The Department of Justice has been investigating possible antitrust violations in the seed industry since 2009. Monsanto, which has acquired more than 20 of the nation?s biggest seed producers and sellers over the last decade, has long pursued a strict policy with its customers, obligating them to buy its bioengeenered seeds every year rather than use them in multiple planting seasons. Farmers who disobey are blacklisted forever.

Though Monsanto hasn?t been named as part of the government?s antitrust probe, it?s widely understood that the St. Louis agricultural giant is the focus.

Third-quarter net income of $1.26 a share surpassed the $1.10 that Wall Street?s sell-side analysts were expecting. Sales of $3.59 billion also topped the consensus target of $3.36 billion.

Compared with a year ago, Monsanto?s profit surged 77% to $680 million from $384 million, or 81 cents a share. Sales rose 21% from about $3 billion a year ago.

The company told investors to expect full-year 2011 earnings of $2.84 to $2.88 a share, above the $2.72 to $2.82 that it had been predicting. Analysts? consensus target for the year was $2.92 a share.

Monsanto shares were changing hands at $69.22 in early trading Wednesday, up about 3.5% from the previous close. Volume was heavy, with 2 million shares turning over over as of 10 a.m. EDT, almost half the daily average.



                                  PART 4

------------------------------- GENET-news -------------------------------

TITLE:   MILESTONE ACHIEVEMENTS FOR SEEDS AND TRAITS AND IMPROVED PERFORMANCE ACROSS CORE BUSINESS DRIVE STRONGER OUTLOOK FOR MONSANTO

SOURCE:  Monsanto, USA

AUTHOR:  Press Release

URL:     http://monsanto.mediaroom.com/index.php?s=43&item=961

DATE:    29.06.2011

SUMMARY: "?The third quarter is always an important quarter for Monsanto, as it effectively concludes our fiscal year from an operational standpoint,? said Hugh Grant, Monsanto?s president and chief executive officer. ?Our U.S. selling season is almost complete, and farmers in Latin America are now harvesting their crops. That gives us real data to validate the momentum we?ve felt. We made significant changes to our business this year, and those changes resonated with our customers. We earned their business and achieved what we set out to achieve: unit volume growth in our core crops, a successful implementation of our agricultural productivity strategy and sustained cost-discipline across our operations. That positions us well for the coming years and the mid-teens earnings growth opportunity we see for this company.?"

----- archive: http://www.genet-info.org/information-services.html -----


MILESTONE ACHIEVEMENTS FOR SEEDS AND TRAITS AND IMPROVED PERFORMANCE ACROSS CORE BUSINESS DRIVE STRONGER OUTLOOK FOR MONSANTO

Company Raises Full-Year Ongoing Earnings Per Share Guidance to $2.84 to $2.88, or $2.82 to $2.86 As-Reported, While Increasing Free Cash Flow Guidance for the Second Time

ST. LOUIS, June 29, 2011 /PRNewswire/ -- Looking at the scorecard of milestones to achieve this year, Monsanto Company executives today said the strength of its seeds and traits business in the United States and Latin America combined with the well-received implementation of its agricultural productivity strategy drove a successful fiscal third quarter for the company. The key third quarter ? one of the company?s most significant historically ? is a highlight in a year that has created real momentum with the establishment of key products in the United States, accelerated adoption in Latin America and the growth of other key markets. The company is well-positioned to conclude fiscal 2011 at a high-teens ongoing earnings growth target and translate that growth into greater free cash flow.

?The third quarter is always an important quarter for Monsanto, as it effectively concludes our fiscal year from an operational standpoint,? said Hugh Grant, Monsanto?s president and chief executive officer. ?Our U.S. selling season is almost complete, and farmers in Latin America are now harvesting their crops. That gives us real data to validate the momentum we?ve felt. We made significant changes to our business this year, and those changes resonated with our customers. We earned their business and achieved what we set out to achieve: unit volume growth in our core crops, a successful implementation of our agricultural productivity strategy and sustained cost-discipline across our operations. That positions us well for the coming years and the mid-teens earnings growth opportunity we see for this company.?

Results of Operations

[please go to the web page to see the data in detail]

Net sales increased $628 million, or 21 percent, in the three-month comparison driven by unit volume growth in both the seeds and genomics and agricultural productivity segments. Net income attributable to Monsanto Company in the third quarter was $680 million.

Gross profit rose 41 percent in the quarter to approximately $2 billion, with margins higher due to mix and cost improvements. For the first nine months, gross profit is up 20 percent or $856 million.

Operating expenses were up $124 million in the third quarter compared to the prior year, as expected. In the three-month comparison, selling, general and administrative (SG&A) expenses were up 20 percent, tracking with the increase expected as the company realizes more investments in employee and sales incentives and new product launches. Research & Development (R&D) expenses increased as the company continues to make incremental investments in R&D to help fuel future growth.

Earnings per share (EPS) for the third quarter were $1.26 on both an as-reported basis and an ongoing basis. EPS for the first nine months of fiscal year 2011 were $3.14 on both an as-reported basis and an ongoing basis. (For a reconciliation of EPS to ongoing EPS see page 1).

Cash Flow

The company?s strong cash position continued in the third quarter. For the first nine months of the fiscal year, cash flow from operations was a source of $944 million compared with a use of $538 million in the first nine months last year. Net cash required by investing activities for the first nine months of fiscal year 2011 was $707 million, compared to $614 million for the same period of fiscal year 2010.

Net cash required by financing activities for the first nine months of 2011 was $766 million, compared to net cash required of $323 million for the same period of fiscal year 2010.

Free cash flow was a source of $237 million for the first nine months of fiscal year 2011, compared to a use of nearly $1.2 billion for the first nine months of fiscal year 2010. (For a reconciliation of free cash flow, see note 1.)

The company continues to make progress on its current $1 billion, three-year share repurchase authorization, representing one of its most significant uses of cash. The company spent $105 million on repurchases in the third quarter for total repurchases to date of $487 million, nearly half the authorization.

Outlook

The company raised its full-year as-reported and ongoing EPS guidance and free cash flow guidance. The company expects full-year 2011 ongoing EPS in the range of $2.84 to $2.88. Full-year 2011 EPS guidance on an as-reported basis is expected in the range of $2.82 to $2.86. (For a reconciliation of EPS, see note 1.)

The company expects free-cash for fiscal year 2011 in the range of $1.1 billion to $1.3 billion. The company expects net cash provided by operating activities to be $2 billion to $2.3 billion, and net cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2011. (For a reconciliation of free cash flow, see note 1.)

The Seeds and Genomics segment consists of the company?s global seeds and related traits business.

In total, sales for Monsanto?s Seeds and Genomics segment in the third quarter of fiscal 2011 increased 12 percent or $285 million over the prior year period, driven by global unit volume growth and a mix upgrade in the United States. The company expects to reach the high end of its gross-profit range of $5.1 billion to $5.2 billion for the business on the strength of the double-digit gross profit results year-to-date.

The company expects to achieve the mid-teens millions of U.S. acres it had targeted for both its Genuity® Roundup Ready 2 Yield® soybeans and the Genuity® reduced refuge corn family this year, adding a positive mix improvement across its U.S. soybean and corn portfolios and establishing a foundation for future growth across both crops. U.S. corn volume growth is complemented by volume growth in Europe and Latin America, where Monsanto has seen volume increases in Argentina and a rebound in planted acres in Brazil.

The cotton business continues to deliver a strong performance, with an increase in acres and breeding improvements bringing growth. Monsanto expects to grow volume as the cotton market expands.

The company continues to work towards achieving sales growth and margin expansion in vegetables.

The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products. The segment saw a strong quarter, with gross profit of $249 million led by the positive response to the repositioning of the glyphosate business and contributions from the lawn-and-garden business, which despite unfavorable weather is set to achieve its second year of above-historical profitability.

The company now expects the segment to deliver gross profit of roughly $700 million for the year, an increase from the previous estimate.

Sales in the third quarter of fiscal 2011 for Monsanto?s Agricultural Productivity segment increased 57 percent, with gross profit improvement as well as a function of volume and cost improvements.

Monsanto announced the staff of the Securities and Exchange Commission is conducting an investigation regarding Monsanto?s customer incentive programs relating to its glyphosate products in fiscal years 2009 and 2010, and Monsanto has received a subpoena for documents in connection therewith. Monsanto is cooperating with the staff?s investigation.

Webcast Information

In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30 a.m. eastern time) today. The call will focus on these results and future expectations and may include a discussion of Monsanto?s strategic initiatives, product performance and other matters related to the company?s business.

Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company?s web site at www.monsanto.com and clicking on ?Investor Information? or at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=122069&eventID=4137207. Visitors may need to download Windows Media Player? prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto Web site for three weeks.

About Monsanto Company

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world?s natural resources such as water and energy. To learn more about our business and our commitments, please visit: www.monsanto.com.