Corn Sales, Strong US Season Lift Monsanto Profit
4 April 2012 ST. LOUIS, Mo. – Robust seed sales and an early US season drove a record quarter for Monsanto.
The St. Louis, Missouri-based company said net sales in the period climbed 15% to $4.75 billion from a year ago as corn grew globally and sales strengthened in the US. It also posted higher corn sales in Latin America. However, its vegetable business fell short due to the struggling European economy and an inventory write-off.
Its net profit edged up to $1.21 billion, or $2.24 per share, versus $1.02 billion, or $1.88 per share, in the same period a year earlier.
The robust results led the company to raise its full-year profit outlook on ongoing basis to between $3.49 to $3.54 per share, and on a reported basis to between $3.45 and $3.50 per share.
“It used to be easy to identify us with a single product and a single geography. But as our business expands, we see multiple layers of growth over multiple areas and coming in over multiple time periods,” Chief Executive Hugh Grant said on a conference call. In the US, “every one of our growth factors is playing out,” Grant said, including mix upgrades in traits and germplasm, volume growth and products in its pipeline. “It’s a compelling opportunity that we see holding growth potential for the rest of this decade.”
In China, the second-largest corn market, “the opportunity is big,” Grant noted, but “improving productivity is going to take time, technology and investment.”
Broken down by segment, its seeds and genomics sales were notably strong, climbing $503 million to $3.92 billion in the quarter, from $3.42 billion a year ago. Its agricultural productivity segment, comprising its crop protection and lawn and garden herbicide businesses, posted a 16% sales jump to $824 million from $710 million a year earlier, on strong volume and mix benefit.
“Our prices continue at a small premium to the generics, and we are seeing strong volume and the mix benefit with more branded Roundup this year,” Chief Financial Officer Pierre Courduroux said on a conference call.
Monsanto noted an uptick in demand for its rootworm traits for corn and cotton this year, and said its soy and cotton businesses continued to perform well. In soybeans, second quarter seeds and traits sales rose 12% driven by an increased trait mix of Genuity Roundup Ready 2 Yield soybeans in the US.
Monsanto said sales are “tracking well” for the expected increase in the company’s newest corn and soybean platforms in the US. While still early in the season, Monsanto expects acres of its Genuity Roundup Ready 2 Yield soybeans and Genuity reduced refuge corn family to increase by more than 10 million acres each. It projects to reach a range of 22 million to 24 million acres for the Genuity reduced refuge corn family and a range of 27 million to 30 million acres for Genuity Roundup Ready 2 Yield soybeans in 2012.
Source: Monsanto, Edited by Jaclyn Sindrich, Managing Editor
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