February 13, 2008

Monsanto raises profit forecast for 2008

Monsanto raised its fiscal 2008 earnings forecast on Tuesday due to solid demand for its corn seed products in the US and the global growth for its herbicide business.

The company raised its forecast to the range of US$2.70 to US$2.80 a share from US$2.50 to US$2.60 a share. The company said strong performance in its herbicide business could now deliver between US$1.3 billion to US$1.4 billion of gross profit in the fiscal year, while its seed and traits business could contribute about US$3.5 billion of gross profit.

Jefferies & Co. analyst, Laurence Alexander, said the main positive surprise versus estimates is faster-than-expected market share gains in North America. Alexander maintained his buy rating on the Monsanto stock with a US$138 price target.

Monsanto recently announced it is seeing strong early-season order patterns in the US for corn seed as well as market expansion in Argentina and Brazil.

Meanwhile, growth in the company's Roundup herbicide business has accelerated due to competitive pricing and improved tillage practices.