NEW YORK (AFX) -- Monsanto Co. reported higher seed sales for its key second quarter on Wednesday, leading to 18% growth in net income ahead of the planting season for corn, soybean and cotton crops in the United States.
Monsanto , based in St. Louis, said that second-quarter net income rose to $440 million, or $1.60 a share, from $373 million or $1.37 a share for the same period a year earlier.
Sales in the three months ended Feb. 28 -- Monsanto's largest quarterly contributor to earnings -- rose 15% to $2.2 billion from $1.91 billion.
Analysts polled by Thomson First Call had forecast earnings, on average, of $1.52 a share and sales of $2.23 billion.
The end of the second quarter marks the start of the U.S. planting season, as farmers take delivery of seeds and evaluate field conditions. The U.S. Agriculture Department said in a March 31 report that farmers intend to plant 78 million acres of corn, 2.5 million less than the average market estimate, partly a result of concerns about higher fuel and fertilizer costs.
The figure of 78 million acres would be down 5% from 2005 and would be the lowest corn acreage since 2001, when 75.7 million acres were planted.
Sales at Monsanto of corn seeds rose 25% to $811 million, and soybean sales climbed 1% to $449 million. The company's acquisition of Seminis, a $1.4 billion deal announced in January 2005, added $148 million in vegetable seed sales.
But the company's line of Roundup and other glyphosate-based herbicides reported a dip in sales to $427 million from $480 million, with lower revenue from Monsanto's Europe-Africa and Asia-Pacific regions.
Monsanto also affirmed a 2006 earnings outlook toward the upper end of its previously announced range of $2.35 to $2.50 a share. The Wall Street analyst average stands at $2.61 a share.
In addition, Monsanto said that it expects to gain market share in the U.S. corn-seed market for a fifth straight year. Monsanto predicted its Roundup Ready corn seeds would be planted on 34 million acres in 2005, putting on track to reach its target market of roughly 50 million acres by 2008.
The shares, down 2% midday Wednesday, narrowed the loss late to end the session with a 0.6% retreat to $85.41. This story was supplied by MarketWatch. For further information see www.marketwatch.com.