The company, which has been struggling with a raft of competitive problems in both its chemicals and seeds and traits businesses, reiterated a forecast for mid-teens percentage growth in earnings per share beginning in 2011.

 

The news of market share gains in Latin America emerged as the company works to underpin investor discontent that caused shares in the global seed company to drop to a more than three-year low on Monday (May 17). The stock fell to US$53.90 that day, a 42% drop over the last year alone.

 

Monsanto shares were unchanged at US$54.26 in morning trading yesterday (May 19).

 

Monsanto, a leading developer of genetically altered soy, corn and cotton, among other crops, said that despite a decline in overall acres, it gained one percentage point in corn market share Argentina. The company said that in Brazil it sold five million acres of its YieldGard Corn Borer, which pushed its share up three points.

 

Executive Vice President Brett Begemann said recent company research indicated that for most US farmers, Monsanto's reduced-refuge family of corn traits products "creates a compelling opportunity for conversion and adoption." The optimistic tone appeared a month after Monsanto predicted corn-seed share this year would be flat and bean-seed share down. The company has said that amid weaker-than-forecast sales of new SmartStax corn seed and Roundup Ready 2 Yield soy, it would lower prices.

 

Part of Monsanto's struggle stems from its herbicide business. The company's agricultural products segment saw a 35% drop in the second-quarter net sales to US$642 million from a year earlier.

 

Analysts have become increasingly critical of the company's market moves, chiding Monsanto for taking an arrogant approach in marketing and pricing of both its Roundup herbicide and branded seeds.

 

"The company's pricing policies have been too aggressive, if not obscene, in our opinion," Morgan Joseph & Co analyst Charlie Rentschler wrote in a report to investors. Still, Rentschler said Monsanto appeared to be making solid progress in regaining its footing.

 

Jefferies & Co analyst Laurence Alexander expressed concern in a report about lower seed pricing and deterioration in the company's glyphosate business. "Overhangs from excess corn inventory and the potential for lower trait fees next year are likely to increase concerns that there could be downside risk to Monsanto's target of mid-teens EPS growth through 2012," he wrote.