Biotech giant Monsanto has increased its outlook for fiscal 2006 earnings on the back of a strong performance from its corn seed and traits business.
The firm, which in April reported second quarter net sales of $2.2 billion, yesterday said it expects full-year 2006 earnings per share (EPS) of $2.50 to $2.55, both on a reported and ongoing basis.
The company's previous 2006 EPS forecast was $2.35 to $2.50.
"We continue to see strong interest and adoption of our company's seeds and trait technologies, led by the breeding and technology advancements in our US corn business and by the increasing momentum being created by our international corn seed business," said Terry Crews, chief financial officer and executive vice president for Monsanto.
Monsanto also said it is closely monitoring its business in Brazil, which has proved a tough trading environment in recent months. This has been partly caused by farmers' protests in the country. Squeezed by rising production costs and a strong Brazilian real that is affecting profitability, Brazilian farmers responded by blocking key roads and railway routes along which grains are shipped to port.
"We are pleased with the progress made to date in the face of the tough market dynamics that have occurred in that region this year. We are poised to meet our free cash flow guidance for the fiscal year," said Crews.
Yesterday's announcement follows strong results in the company's first and second quarter results this year, where net sales increased 31 and 15 percent respectively.
"Our business performed solidly in the first half of this fiscal year. Our second-quarter results, which serve as a key contributor to our overall fiscal year performance, were strong based on greater adoption of our corn seed and traits, and the addition of our Seminis business. These businesses are contributing nicely to our overall portfolio and should help us build positive momentum as we head into the crop season in the United States - the largest market for our business," said Monsanto's president and chief executive officer Hugh Grant in April.
The company is due to report its third quarter results on June 29.