Monsanto Posts Strong Profit on Soybean, Crop Protection Sales

Monsanto Co. announced its third-quarter profit rose 18% led in part by continued momentum in soybean technologies, and said it is working with Bayer toward completion of the pending merger by the end of the calendar year.

Monsanto earned $843 million, or $1.90 earnings per share, compared with $717 million, or $1.63 per share a year earlier.

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Sales rose to $4.23 billion from $4.19 billion in the year-ago period. Crop protection (known as Agricultural Productivity) sales climbed to $1.1 billion in the period, from $982 million a year earlier.

Agricultural Productivity gross profit increased approximately 12% for the third quarter, due to improvements in pricing and volumes for glyphosate-based herbicides and continued sales of XtendiMax dicamba-based herbicide.

In soybeans, Monsanto has seen strong demand for the latest technologies, with growth of approximately 30% in global gross profit now expected for fiscal year 2017. U.S. growers have planted 20 million acres of Roundup Ready 2 Xtend soybean varieties across the country, and early season results underscore the efficacy of the company’s integrated crop system. In South America, strong performance of INTACTA RR2 PRO soybeans has led to record market adoption. The technology is delivering a more than 4 bushel per acre advantage on average over other soybean varieties, and total planted acreage in South America now exceeds 50 million acres.

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Monsanto said its corn platform also continues to perform well. In the U.S., the company expects genetic share gains for fiscal year 2017 and sold out of its DEKALB Disease Shield hybrids. In Europe, acres planted to corn year-over-year were relatively flat, and the company saw modest germplasm price-mix lift in local currency, along with anticipated genetic share gains. Overall, the company expects its global corn germplasm price-mix lift, in local currency, to be flat to up low-single digits, as a percent, for the full year.

Paid acres for Climate FieldView digital platform surpasses 35 million in U.S., exceeding its annual target of 25 million acres.

Looking ahead to the full year, the company expects as-reported EPS to be at the high end of the range of $4.09 to $4.55, and confirms EPS at the high end of the range of $4.50 to $4.90 on an ongoing basis.

The Seed and Genomics segment gross profit is now expected to be up high-single digits in terms of percentage for the year. For the Agricultural Productivity segment, gross profit is still expected to be in the range of $850 to $950 million as the segment continues to deliver expected results.

For the fourth quarter, the company expects to receive the benefit of about $70 million in non-core asset sale gains from strategic deals. Roughly half of these gains are expected to benefit the Agricultural Productivity segment, and half are expected to benefit the Seeds and Genomics segment. Both are expected to be recorded in other income and are part of the company’s ongoing strategic portfolio management efforts.

 

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