January 6, 2012

 

 

Monsanto announced an increased number of advance seed orders by US growers while profits rise above an upgraded forecast due to a continued strong South American demand.

 

The seed giant rated as "strong" the level of advance orders by US farmers for the spring planting season when, in corn, its cutting edge genetically modified seed is expected to account for roughly one-quarter of sowings, and in soybeans some 40% of area.

 

The company's US order book "is ahead of the same point in time last year, and tracking well with 2012 targets", Monsanto said, adding that the pace of demand "confirms US momentum" and "underscores confidence in a step up of key corn and soy platforms in 2102".

 

The group forecasts US area sown with its Genuity Roundup Ready 2 Yield soy seed, modified for factors including resistance to herbicides to enable growers easily to spray off weeds, jumping to 27 million - 30 million acres this year.

 

US farmers will sow some 22 million - 24 million acres with the so-called Reduced Refuge genetically modified corn.

 

The comments came as Monsanto unveiled a jump in earnings to US$126 million for the September-to-November period, the first of its financial year, from US$9 million in the same period of 2010.

 

Sales rose by one-third to US$2.44 billion, boosted by continued strength in Latin America, where greater use of genetically modified seed, coupled in many cases with extra area, is spurring demand.

 

Indeed, the group highlighted 46% growth to US$895 million in corn seed sales, "driven by the Latin American market".

 

"We've seen a very strong start to the [company's financial] year, with real growth in Latin America and early orders in the US that underscore our sustained momentum carrying into 2012," Hugh Grant, the Monsanto chairman and chief executive, said.

 

On a per share basis, earnings came in at US$0.23 for the quarter, beating guidance the group upgraded to US$0.15-20 last month, besides analysts' forecasts.

 

Wall Street had pencilled in a US$0.16-a-share result.

 

Monsanto added that, for the full year to August, it was now guiding to "the high end" of a forecast of "mid-teens" earnings per share growth, expecting to achieve US$3.39 – US$3.44 per share.