- By Region
Strong demand for genetically modified corn seeds from farmers in the US, Latin America and eastern Europe helped Monsanto, the world’s biggest seedmaker by revenues, report quarterly revenues well ahead of Wall Street expectations.
The company said net income in its fiscal third quarter was $937m, or $1.74 a share, up from $692m, or $1.28, in the same period last year. Excluding a tax rebate, earnings were $1.63 a share, well ahead of the $1.59 that analysts had been expecting.
Revenues for the quarter were more than $4.2bn, up from $3.6bn a year ago and above the $4bn analysts had forecast.
The better than expected results were almost entirely due to record sales of corn seed, by far the company’s biggest product. Corn seed revenues jumped to $1.5bn, up from $1.1bn in the same period last year.
The company reaffirmed the improved full-year guidance it gave last month of earnings of $3.65-$3.70 on an ongoing basis, up from its prior forecast in April of $3.49-$3.54.
“I feel very good about where we stand,” said Hugh Grant, chief executive. “As I look to 2013 and beyond, I am confident as our momentum is now validated with sustained business results.”
Monsanto has announced a $1bn three-year share repurchase plan, which begins next week on the heels of the last $1bn two-year-long buyback programme. Some investors have questioned whether Monsanto is overpaying for its own stock, since the company’s shares are trading at a higher premium to earnings than those of competitors such as DuPont and Syngenta.
Corn futures hit a nine-month high on Wednesday on concerns about a spell of hot, dry weather in the US midwest cornbelt. Although showers are forecast for some areas, this is mainly expected to help the soyabean crop.
Monsanto shares were trading up 2 per cent at $79.42 on Wednesday morning in New York.