Monsanto Earnings Top Analyst Forecasts on Latin America

Monsanto Co. (MON), the world’s largest seed company, reported preliminary fiscal first-quarter profit that topped analysts’ estimates amid “strength” in its businesses in Brazil and Argentina and changes to cotton-seed pricing in Australia.

Earnings were 15 cents to 20 cents a share in the three months ended Nov. 30, the St. Louis-based company said today in a statement. The average of 15 analysts’ estimates compiled by Bloomberg was for profit of 13 cents. Monsanto last month forecast profit of 10 cents to 15 cents.

Chief Executive Officer Hugh Grant is expanding corn-seed sales in Argentina and Brazil, the drivers of first-quarter earnings, where he plans to launch the first insect-killing soybean seed. Better-than-forecast results reflect the strength in Latin America and a change to Australia cotton pricing that accelerated sales, Monsanto said today in a presentation on its website.

“Timing shifts are not unusual and don’t tell us anything about the relative strength of sales,” Mark Connelly, a New York-based analyst at Credit Agricole Securities who rates the shares “buy,” said today in a note. “We continue to like Monsanto for the strength of its technology and the unusually high number of ways earnings can surprise to the upside.”

Monsanto said its earnings forecast for the full fiscal year is unchanged at $3.34 to $3.44 a share. It also maintained its full-year cash-flow guidance of $1.3 billion to $1.5 billion.

The shares fell 0.8 percent to $71.73 in New York. They had gained 3 percent this year.

The company said it will release its first-quarter earnings on Jan. 5.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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