Monsanto

Monsanto Shrs Hit Record High; 1Q Net Boosted By South Amer
Last update: 1/3/2008 11:11:19 AM
By Christopher Hinton

Monsanto Co. (MON) shares hit a record high Thursday, rallying as the agricultural company raised its earnings outlook for fiscal 2008 and reported having nearly tripled its fiscal first-quarter profit.

The strong results are thanks in part to robust demand in South America for its Roundup herbicide and seed trait products, the St. Louis company's results showed.
"The quarter was spectacular," said Charlie Rentschler, an analyst with the investment firm Wall Street Access.

Shares of Monsanto recently changed hands at $118.45, up $6.98, or 6.3%, on volume of 5 million shares, already topping the stock's average daily volume of 4.6 million shares. Earlier Thursday, the shares traded as high as $119.80 a share, beating its previous record best of $116.25 set Dec. 27.
In the last year, Monsanto shares have more than doubled on demand for the company's hybrid corn, soybean and cotton seed traits that help to protect crops from pests while providing greater yields.

For the fiscal first quarter ended Nov. 30, Monsanto said it earned $256 million, or 46 cents a share, more than double the $90 million, or 16 cents a share, earned in the year-ago first quarter.
Analysts polled by Thomson Financial had expected, on average, earnings of 35 cents a share.
Monsanto also raised its earnings outlook for fiscal 2008 to $2.50 to $2.60 a share, up from its prior view of about $2.40 a share.

"Our results in the first quarter represent a solid start to the fiscal year and highlight the strong performance of our Latin American business," said Chief Executive Hugh Grant in a statement. "With the most significant part of our annual business cycle still to come, we believe these results position us for another strong fiscal year."

The improvement in first-quarter cash flow - to $996 million from $600 million last year - indicated plenty of prepayments from U.S. corn farmers.

"The spring should be very, very strong," Rentschler of Wall Street Access said.
Monsanto's second and third quarters are typically its strongest.
Total sales for the latest quarter rose to $2.1 billion from $1.5 billion, on the back of robust Roundup sales in Brazil and Argentina as well as greater adoption of its seed traits. Herbicide sales to Europe also helped, Monsanto said.
Analysts had been looking for first-quarter sales of $1.9 billion, on average.
Shares of Monsanto rival Syngenta AG (SYT) were also climbing Thursday, recently up $3.46, or 6.8%, to $54.09.

Bullish On Brazil

Monsanto noted that higher corn commodity prices are driving growth in plantings in Brazil to about 35 million acres. Currently, about 28 million acres use hybrid seeds, the company said.
Recent estimates also suggest that soybean production in the country could be slightly higher than last season as well, when 50 million acres were planted, the company said.
Monsanto also noted in a separate news release that its research and development pipeline volume was currently one of the company's largest, including SmartStax corn, disease-resistant soybean, second-generation high-oil soybeans, high-stearate soybeans and high-oil corn.
The agricultural industry has been benefiting from new demand in biofuels, which has increased crop commodity prices and encouraged the planting of additional acreage.
In November, sector bellwether Deere & Co. (DE) reported 52% growth in fourth-quarter earnings due to strong overseas sales. For 2008, the farm equipment maker expects to see double-digit sales of its products in the U.S. and to South America.
Deere's shares were recently trading up $2.42, or 2.7%, recently, changing hands at $92.62.
-By Christopher Hinton; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 03, 2008 11:11 ET (16:11 GMT)