KANSAS CITY, Mo. – Monsanto Co. (MON) said Wednesday that second-quarter earnings more than doubled on strong sales of seeds and gene technology amid an active U.S. spring planting season.
The gains were tied both to price increases for Monsanto's genetically modified corn and soybean technology as well as an increased share of U.S. corn acreage.
"The U.S. seeds and traits business is performing very well," said Monsanto chief financial officer Terry Crews in a conference call with analysts and media.
The company, whose shares were up about 2 percent, said profit rose to $373 million, or $1.37 a share, for the quarter ended in February, from $154 million, or 57 cents a share a year earlier. Analysts, on average, expected the company to earn $1.32 a share, according to Reuters Estimates.
Monsanto said results were boosted by a 35 percent jump in revenue from its seeds and gene technology business, which makes plants resistant to herbicide and insects. Monsanto also saw a 17 percent gain in sales in its agricultural productivity segment, which includes branded Roundup herbicides and other glyphosate-based herbicide (search) products.
Overall, net sales increased 27 percent to $1.9 billion in the second quarter.
The results included after-tax restructuring charges of $6 million, or 2 cents per share, and income on discontinued operations of $2 million, or 1 cent per share, associated with the planned sale of the company's environmental technologies businesses.
Expenses were slightly higher at $127 million for the quarter, in part because of Monsanto's expansion of its seeds business.
The company bought the North American canola seed businesses of Advanta Seeds (search) last year, as well as Channel Bio Corp. (search) , which is now part of Monsanto's American Seeds Inc. subsidiary. The company also recently bought Emergent Genetics Inc. (search) to bolster its presence in the cotton market.
Monsanto has particular strength in the soybean market, with market share estimated at more than 80 percent of U.S. soybean acreage.
The company's revenue was once largely dependent on its agricultural herbicide sales, but Monsanto has been shifting its focus to sales of seeds and development of genetic modifications for crops because of increased competition in herbicide market.
The company reiterated its forecast given last week that pegged profits for the year at between $2.00 and $2.05 on an ongoing basis. Crews cited strength in the United States as well as opportunities in Latin America and better-than-expected performance in Europe, Africa and Asia.
But Crews warned that Monsanto was facing many unknowns, including potential liability related to the bankruptcy of former affiliate Solutia Inc. (search) , and ongoing uncertainty about the company's ability to collect fees for biotech soybean seeds in some Latin American markets.
Monsanto shares were up $1.12 at $62.27 on the New York Stock Exchange (search), after surging as high as $63.84 early in the session.