Monsanto reports strong third quarter sales

By staff reporter

- Last updated on GMT

Related tags: Monsanto, Revenue

Biotech giant Monsanto has reported strong results for its third
quarter, with its sales continuing to benefit from a good
performance by its seeds and traits business.

The US firm yesterday reported a 15 percent increase in net sales for the quarter, up to $2.3bn compared to last year's figure of $2bn.

"Nothing says growth like raising the ceiling on what is possible, and that is exactly the trend we've seen in the performance of our seeds and traits business up to this point in the year. This performance sets us on the future trajectory for growth, and enhances our leadership position through the end of the decade,"​ said Monsanto's chairman, president and chief executive officer Hugh Grant.

Monsanto said the key drivers behind the continued growth of this business segment were higher revenues from the company's soybean business, and greater farmer adoption of the company's corn products.

Sales from the company's Seminis vegetable and fruit seed business, which was acquired in the third quarter of fiscal year 2005, also contributed to the increase in the quarter, said the firm.

Yesterday's results bring the company's net sales for the first three quarters of fiscal year 2006 up to $5.95bn, up 19 percent from sales in the first nine months of last year.

Net sales in the company's first and second quarter results this year increased 31 and 15 percent respectively.

Indeed, last month Monsanto raised its outlook for fiscal 2006 earning, as a result of the performance of its corn seed and traits business

The firm, which in April reported second quarter net sales of $2.2bn, at the end of May 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,"​ Terry Crews, chief financial officer and executive vice president for Monsanto had said at the time.

Monsanto reported net income of $334m in the third quarter of fiscal year 2006, which was significantly higher than the same period last year. The increase in net income for the third quarter related to higher revenue from the company's US seeds and traits business, as well as a 2005 write-off of in-process R&D related to the Seminis and Stoneville acquisitions. Net income of $833m for the first nine months of fiscal year 2006 was also significantly higher than the same period last year.

Monsanto has also published a preliminary report on its biotech trait acreage for fiscal year 2006. This report is available on Monsanto's web site.

Earlier this week, Monsanto announced that its subsidiary American Seeds, Inc. (ASI) is to acquire five seed companies for around $77m. The specific terms of the individual transactions were not disclosed. Collectively, these five seed companies represent approximately 1.4 percent and 2.0 percent of total US corn and soybean seed sales, respectively.

The company said the additions are expected to "further ASI's ability to reach farmers customers in underserved geographies with a technology-rich, locally-oriented business model."

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