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Monsanto earnings surge on seed, traits business

Agriculture.com Staff 06/25/2008 @ 7:40am

A big jump in total sales pushed Monsanto's earnings a good deal higher in the third quarter, according to data released Wednesday.

Earnings for the quarter totaled $811 million, or $1.45 per share, according to a company report. That's up from $570 million in the same quarter of last year. The boost was driven primarily by a 26.4% rise in total net sales which, for the quarter, totaled $3.59 billion.

"Backed by continued growing demand for our products, the first nine months of our fiscal year has been remarkable and we're now increasing our full-year guidance. This strong growth sets up a solid foundation for our business and to reach our target of more than doubling gross profit in 2012," says Monsanto chairmam and CEO Hugh Grant. "While others are asking should it be food OR feed OR fuel, we believe the answer is AND, and we have the solutions in hand to be a significant part of that answer."

Notably higher in the results announced Wednesday was the total revenue for the company's seed and genomics segment, which recorded $2 billion in sales for the quarter. That's 20% higher than the same quarter of last year.

"During the third quarter of fiscal year 2008, the company realized increased soybean seed and traits revenues in the United States, increased corn seed and trait revenues in the United States," according to a company report. "Monsanto expects that strong customer demand for its branded corn seed products contributed to a seventh consecutive year of market share gains in the U.S. corn seed market. In the United States, Monsanto's DeKalb brand could realize two to three percentage points in share growth."

Looking ahead, Monsanto officials say they expect the story to be different for the fourth quarter, which is historically lower each year. "Monsanto's fourth quarter is largely influenced by its global cotton business and U.S. Roundup agricultural herbicides business. The company historically records a loss in the fourth quarter," according to Wednesday's company report.

But, a slower fourth quarter will likely fall well short of putting much of a dent in Monsanto's strong year. Continued strength in the world glyphosate market will likely keep company revenues on the bullish side.

"Net sales in the company's first nine months of fiscal year 2008 resulted in year-to-date sales of $9.5 billion, which were 35% higher compared with sales in the same period last year," according to Wednesday's report. "Key contributors to the company's growth included increased sales of Roundup and other glyphosate-based herbicides globally, higher worldwide corn seed and traits revenues as well as increased soybean seed and traits revenues and cotton seed and traits revenues in the United States."

A big jump in total sales pushed Monsanto's earnings a good deal higher in the third quarter, according to data released Wednesday.

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