Monsanto Co. (MON) Wednesday lifted its fiscal year earnings outlook as second-quarter profit handsomely surpassed estimates, amid a 15 percent increase in sales, aided by continued growth of the agricultural products maker's global corn business and positive performance of its agricultural productivity segment.
Hugh Grant, chairman and chief executive officer for Monsanto, said, "Our commitment to serving our farmer customers around the world is at the core of everything we do. By understanding their needs and finding new ways to work with them to meet growing demand, we've achieved momentum in our business and strong results across our global portfolio.''
Monsanto raised its full-year ongoing earnings per share guidance to $4.40 to $4.50 per share. Full year 2013 earnings per share guidance, on an as-reported basis, is expected to be in the range of $4.42 to $4.52 per share. On average, 23 analysts polled by Thomson Reuters expect annual earnings of $4.57 per share. Analysts' estimates typically exclude special items.
The outlook issued in January was for ongoing earnings per share in a range of $4.30 to $4.40 per share and as-reported earnings in a range of $4.31 to $4.41 per share.
Net income attributable to the company for the second quarter increased to $1.48 billion or $2.74 per share from $1.21 billion or $2.24 per share in the prior year. On an ongoing basis, earnings were $2.73 per share, while it stood at $2.28 per share last year. Wall Street expected earnings of $2.58 per share. Net sales for the quarter increased to $5.472 billion from last year's $4.748 billion, driven partly by 16 percent sales growth from its global corn business. Analysts expected revenues of $5.27 billion. The seeds and genomics segment, which consists of Monsanto's global seeds and related traits business, generated $4.35 billion in sales, up 11 percent from last year.
According to the company, its global corn business led the Seeds and Genomics segment performance, as it expects to hit record total corn volumes in 2013. The quarterly results were driven partly by the conclusion of a record second season in Brazil where Monsanto's latest corn products saw strong demand. The U.S. corn business also performed well.
The agricultural productivity segment sales climbed to $1.126 billion from $824 million, reflecting the continued benefit of a favorable marketplace environment. The segment consists of the crop protection products and lawn-and-garden herbicide products. MON closed at $104 on Tuesday. The stock is up 0.5 percent in pre-market trading.
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