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Monsanto reports fourth-quarter loss, but overall net income increase for fiscal year 2007

Agriculture.com Staff 10/17/2007 @ 7:06am

Monsanto reported October 10 a fiscal fourth-quarter loss of 39 cents per share, or $210 million, for fiscal year 2007.

For the entire fiscal year, though, the news was better. The company reported net income of $993 million for fiscal year 2007, above net income of $689 million for fiscal year 2006.

Those are a couple highlights from the company's earnings announcement. The fourth-quarter loss eclipsed last fiscal year's fourth-quarter loss of 27 cents per share, or $144 million. The company attributed the loss to its acquisition of the Delta and Pine Land cotton business, which included a $186 million in-process research and development charge this quarter.

Wall Street tends to ignore non-reoccurring items like this in the long term, says Mark Gulley, a senior specialty chemical analyst for Soleil Securities Group. With this excluded, the company's earning loss per share dipped to 18 cents. Monsanto also reported a $2 diluted earnings per share on an ongoing basis in fiscal year 2007.

"They said for fiscal year 2007 they'd do $2 per share, and they did it," says Gulley. That's above the $1.30 earnings per share figure Monsanto obtained in fiscal year 2006.

Monsanto increased market share in seed corn, with its Dekalb brand boosting market share four percentage points. This is in line with projections the company made as recently as third quarter 2007 and at conferences since then, says Gulley.

Monsanto continues to make headway in traits. Total U.S. acres where at least one of the YieldGard Corn Borer and Rootworm and Roundup Ready traits were planted tallied 121.1 million acres in 2007, up from 75 million acres in 2006. Gulley says this figure is expected to exceed 200 million acres by 2010.

Broken down, farmers planted the Yield Gard Corn Borer trait on 42.4 million acres in 2007, up from 2006's 32.3 million acres. Farmers planted the YieldGard Rootworm trait on 20.8 million acres in 2007, up from 10 million acres in 2006. Roundup Ready traits tallied 57.9 million acres in 2007, up from 32.7 million acres in 2006.

Globally, trait acres also increased. Monsanto pegged farmers planted 246.5 million acres in 2007 to at least one trait, up from 2006's 217.4 million acres.

All this contributed to higher sales in the company's seeds and genomics segment, which includes its seeds and traits business and genetic technology platforms.

Sales for this segment were $742 million for the fourth quarter of fiscal year 2007, 40% higher than sales in the same period last year. Monsanto realized record segment sales of $5 billion for fiscal year 2007, 25% higher than fiscal year 2006.

The increased corn sales for the fiscal year 2007 were partially offset by lower sales of soybean seeds and traits in the United States, as well as lower sales of cotton traits in Australia and the United States. Monsanto officials said lower sales in the United States reflected farmer planting trends, while drought lowered sales in Australia.

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