Monsanto Profit Climbs on Glyphosate Momentum, Soybeans in Latin America
8 January 2014 Monsanto said on Wednesday that its biotech soybean and Roundup sales gained momentum in the first quarter, bolstering its profit, tempered by a decline in corn seed acreage in Latin America and cotton in Australia.
Orders are trending strongly in the U.S., demand is robust for new corn products in Brazil and Argentina, and its launch of an expected 3 million acres of Intact RR2 Pro soybeans in South America remains on track, Monsanto said. Ultimately it plans on Intacta being planted on 100 million acres in the two countries.
“This is a year where some heavy insect pressure actually showcases the benefits of Intacta more visibly. Across Brazil, there are common reports of growers already spraying normal soybean fields four to five times to deal with heavy pressure,” President and Chief Operating Officer Brett Begemann said on a conference call. Intacta requires only two to three sprays, he said.
The company posted $3.14 billion in net sales in the first quarter of 2014, up from $2.94 billion in the year-ago period. Its agricultural productivity (crop protection) segment sales climbed to $1.47 billion from $1.18 billion a year ago, “reflecting the continued benefit of a favorable marketplace environment.”
Sales in its seeds and genomics business dipped to $1.68 billion from $1.76 billion a year earlier, on a decrease in corn acres in Latin America, “some acre and timing effects related to cotton in Australia, and a more normalized U.S. sales contribution pattern after the step up from last year’s accelerated season.”
Net profit for the period rose to $368 million, or 69 cents per share, compared with $339 million, or 63 cents a share in 2013.
The company also announced it entered a memorandum of understanding with one of its largest distribution partners and the largest U.S. agricultural retail distributor, WinField, to explore connections between Monsanto’s Integrated Farming Systems and The Climate Corporation portfolio with Winfield’s R7Tool, with satellite imagery technology licensed from Geosys, for precision farming. “The joint work would represent a first-of-its kind opportunity on new technology for precision agriculture and the development of new broad decision-support tools to help farmers produce more food with fewer resources,” it said.
Looking ahead, Monsanto said it continues to expect strong operational growth from its core business, reflected in mid-to-high teens growth in EBITDA. It backed its fiscal year 2014 earnings per share outlook of $5.02 to $5.22 per share.
Monsanto also highlighted 29 phase advancements out of more than 70 pipeline projects across its research and development platforms – including more than 10 advancements in its Integrated Farming Systems precision agriculture and biologicals platforms.
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