Monsanto yesterday raised its estimates for the company's second-quarter earnings on the back of successful results from its seeds and traits business.
The company said that solid year-to-date performance globally, higher revenues from corn and soybean traits in the US, increased corn seed sales in the Europe-Africa region, and higher revenues for Roundup and non-branded glyphosate-based herbicides globally - excluding the US - were driving the company' forward.
Monsanto said it now expects earnings-per-share (EPS) to be in the range of $2.00 to $2.05 on an ongoing basis for fiscal 2005. Previous updates from the firm had estimated towards the upper end of the $1.85 to $2.00 range.
For the second quarter, Monsanto now expects EPS to be approximately $1.38 per share on an ongoing basis.
Monsanto will report its complete second-quarter earnings on Wednesday 6 April.
Monsanto last week completed its acquisition of leading seed company Seminis, paying $1 billion in cash and assuming about $400 million in debt.
The company spokeswoman Lori Fisher said the total valuation of the deal has not changed, but due to the seasonal nature of the business and the timing of the closure, Monsanto will initially incur slightly higher working capital needs than first projected, which translates to a "slightly higher net debt level", according to Reuters.
Poland said recently it wanted to ban the import and planting of 17 varieties of genetically modified maize seed made by Monsanto and in January, Hungary outlawed the planting of Monsanto maize seeds.
However, when Monsanto announced it was acquiring Seminis in Janaury, the company denied it had any immediate plans to genetically modify its seeds.
Fisher told FoodNavigatorUSA.com that the decision was taken to purchase the company because of its position as a market leader, its suitability to benefit from Monsanto's breeding research and development, and the fact Seminis will immediately add value to Monsanto's profile.
She added that any plans to genetically modify the seed would be for the future.
"There could be a future potential for biottech, but this is not the reason why we bought Seminis," said Fisher. In the near term, she explained, they will be looking at using Monsanto's advanced "non-biotech" breeding techniques - that have been applied mainly to bulk crops such as soy and corn - to help Seminis improve yields in certain crops. This should also reduce the time it takes to bring a new product to market.
Until now Monsanto has focussed on large-scale crops such as oilseed rape and corn and has had no profile in the vegetable seed market. This will be rectified by the purchase of Seminis.
Moreover, this acquision will give Monsanto a further foot in the door in Europe and the Middle East, which account for a heavy percentage of Seminis' sales, and to a lesser degree in Asia.