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Monsanto Lifts Forecast After Strong Q2 - Update


Agricultural biotechnology giant Monsanto Co. (MON) on Wednesday lifted its full-year earnings forecast after reporting better-than-expected second-quarter results, driven by strong seeds performance and an early U.S. planting season. Both earnings and revenues topped Wall Street view.

Hugh Grant, chairman, president and CEO of Monsanto, said, "Our strong U.S. selling season and growth from Latin America during the first six months have come together to set us up for a great 2012. We've seen contributions from growth across crops and geographies, which position us well to deliver high-teens ongoing earnings growth this year."

In the quarter, net income attributable to the company increased to $1.21 billion or $2.24 per share from $1.02 billion or $1.88 per share in the prior year. The latest quarterly results included a $0.05 per share impact related to Nitro claims settlement.

Ongoing earnings per share increased to $2.28 from last year's $1.87, beating analysts' estimate by a wide margin. On average, 20 analysts polled by Thomson Reuters expected earnings of $2.12 per share. Analysts' estimates typically exclude special items.

Net sales climbed 15 percent to $4.75 billion, comfortably surpassing analysts' estimate of $4.53 billion.

The Seeds and Genomics segment, which consists of the company's global seeds and related traits business, saw a sales increase of nearly 15 percent to $3.92 billion, clocking the best second quarter for the segment.

The segment's growth was led by the strength in the corn business globally, with the strongest contributor being the U.S. corn business, given the timing of an early planting season.

The Agricultural Productivity segment generated $824 million in sales, up 16 percent from last year. The division consists of the crop protection products and lawn-and-garden herbicide products.

Looking ahead, the company raised its full-year ongoing earnings per share guidance to $3.49 to $3.54 per share. On an as-reported basis, earnings are now expected to range between $3.45 and $3.50 per share. Previously, the company expected ongoing and as-reported earnings in the range of $3.39 to $3.44 per share. Analysts currently project earnings of $3.51 per share for the full year.

MON shares closed Tuesday at $81.80, up from the prior close of $81.18, on a volume of 4.49 million shares. The stock is up 1.5 percent in pre-market trading.

by RTTNews Staff Writer

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