Monsanto Profit Exceeds Estimates on Soybeans

Monsanto Co. (MON), the world’s largest seed company, reported fiscal second-quarter earnings and sales that exceeded analysts’ estimates on a larger soybean profit as farmers plan to sow more of the crop.

Net income in the three months through February increased to $1.67 billion from $1.48 billion a year earlier, the St. Louis-based company said today in a statement. Earnings excluding one-time items were $3.15 a share, topping the $3.06 average of 21 estimates compiled by Bloomberg. Sales rose to $5.83 billion from $5.47 billion a year earlier, beating the $5.8 billion average estimate.

Monsanto maintained its fiscal full-year earnings forecast of $5 to $5.20 a share. The average of 21 estimates was $5.26. The shares rose 2.6 percent before the start of regular trading in New York.

Chairman and Chief Executive Officer Hugh Grant is benefiting from lower production costs and rising demand for soybeans. Tightening supplies have pushed soybean futures to the highest in nine months and corn to an eight-month high. Monsanto said profit from soybean seeds and related licenses rose 36 percent in the quarter as the cost of goods sold fell.

“We see a recovery in corn and soybean futures providing a stabilizing hand to seed margins,” Tim Tiberio, a New York-based analyst at Miller Tabak & Co. who recommends buying Monsanto shares, said in a March 28 note.

Monsanto rose 0.2 percent to $113.99 yesterday in New York. The shares have declined 2.2 percent this year.

U.S. farmers plan to boost soybean plantings by about 5 million acres this year to a record 81.5 million acres, more than making up for a 3.67-million-acre decline in corn, the Department of Agriculture said March 31.

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To contact the editors responsible for this story: Simon Casey at Steven Frank, Carlos Caminada

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