What recession? Monsanto reports big-time earnings boost
Greater demand in Latin America for Monsanto Company's products propelled the company to record-setting net sales and net income results for its fiscal 2009 first quarter, company officials announced Wednesday.
Company officials reported net sales of $2.6 billion for the first quarter of fiscal 2009, a 29% increase compared to the first quarter of fiscal 2008. Strong demand in Brazil for Roundup and other glyphosate-based herbicides led the increase in Monsanto's first-quarter sales, followed by higher corn seed and trait sales in the United States and Brazil, and higher sales growth in soybean seeds and traits in the United States from strong early-season deliveries.
"Our Latin American business once again displayed its strength and set the pace for a great fiscal 2009, giving us confidence to raise our earnings projections and helping us take another solid step toward fulfilling our 2012 gross profit commitments," says Hugh Grant, chairman, president and chief executive officer for Monsanto in a company report.
Monsanto recorded net income of $556 million for the first quarter of fiscal 2009, a 117% increase compared with net income of $256 million for the same period last year. (See more first-quarter financial results).
The first quarter of Monsanto's fiscal year typically and primarily reflects the impact of its Latin American businesses. The second and third quarters are expected to be the primary drivers for the company's full-year results, as they largely reflect both the relative size of the company's U.S. business and the importance of its seeds-and-traits business to Monsanto's earnings.
Sales for Monsanto's Seeds and Genomics segment, which comprises the company's global seeds and related traits business, and biotechnology platforms, in the first quarter of fiscal 2009 increased 31% ($263 million) compared to the same period last year.
Corn seed and traits net sales increased 34% ($161 million) to lead the overall growth in the segment for the quarter. Along with higher selling prices in the United States for corn seeds and traits, these sales increases were largely driven by the successful launches of the YieldGard Corn Borer trait technology in Brazil and the double-trait offering of YieldGard Corn Borer and Roundup Ready Corn 2 in Argentina. Officials say the company expects to sell 1.5 million to 2 million acres of YieldGard Corn Borer in Brazil this year, and has sold more than 2 million acres of YieldGard Corn Borer and Roundup Ready Corn 2 in Argentina.
Specific to Monsanto's U.S. corn business sales, the company anticipates triple-trait offerings through its DEKALB and American Seeds (ASI) brands to represent approximately 70% of their volume this year. The company is forecasting that its triple-trait product could be planted on 34 million to 35 million acres in the United States, an increase of roughly 17% to 21% from last year.