Unstoppable Latin America Underpins Monsanto Profit

Avatar for Posted by |8 January 2013

Monsanto's corn seed sales soar in Latin America.

An ever-expanding Latin American corn business and robust U.S. crop protection sales drove a strong first quarter for Monsanto, the world’s largest seed company.

The results gave an unusually early boost to the St. Louis, Missouri-based ag giant’s profit outlook for the year: It expects 2013 reported earnings to range from $4.31 to $4.41 per share, and ongoing EPS to range from $4.30 to $4.40.

Brazil, Argentina and Mexico were key catalysts of its corn seeds and traits business, which sharply outperformed Monsanto’s other biotech segments. The unit’s sales jumped to $1.14 billion from $895 million in the same period a year ago, while net profit climbed to $686 million from $531 million.

Its Agricultural Productivity business, which consists of crop protection and lawn-and-garden herbicide products, delivered $1.18 billion in sales – accounting for about 40% of total sales – up $279 million from a year earlier. It cited the “benefit of a favorable marketplace environment.”

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Positive news for Latin American and the U.S. markets continues to boost business. A few comments the company made:

  • In Brazil, farmers continue to upgrade from single-trait corn products to the first double stack, VT PRO2, it said. VT PRO 2 is the second-highest volume trait in the company’s Brazil corn portfolio this year.
  • In Argentina, the company has seen strong adoption of its Genuity VT Triple PRO product. The triple-stack corn product is on track to be 40% of its Argentine corn portfolio in its second year on the market.
  • The U.S. order book is strong, with orders outpacing those made during the same period last year: “With two years of strong performance, company executives said the U.S. business is in position to grow again in 2013.”

For the company as a whole, first-quarter earnings climbed to $339 million, or 63 cents per share, from $126 million, or 23 cents a year ago. Sales totaled $2.94 billion, up 21% from $2.44 billion a year earlier.

It also highlighted 18 advancements in its R&D pipeline made last year.

“In this record year for our pipeline, we added next-generation agronomic trait solutions, advanced our work in the unique space of yield and stress with the launch of Genuity DroughtGard Hybrids, advanced breeding projects that combat yield-reducing pests and diseases, and also added projects in our newest area, agricultural biologicals,” said Robb Fraley, Monsanto chief technology officer.