Strong seed corn sales in South America, Mexico and the United States contributed to strong results during the first quarter ended Nov. 30, 2012, at Monsanto Co.
Sales for Monsanto’s Seeds and Genomics segment increased 14% in the first quarter to $1,755 million, with corn seed and traits performance driving the first-quarter strength, the St. Louis-based company said.
“Corn seed and traits net sales increased 27% over last year’s first quarter to $1,139 million, driven in part by the business strength in Brazil, Argentina and Mexico,” Monsanto said. “Complementing the corn performance in Latin America is the early momentum in the U.S. seeds and traits business.”
The company noted a positive U.S. order book backed by strong cash flow and customer prepayments, with the pace of orders ahead of the same point the previous year.
Monsanto said Brazilian farmers continue to upgrade from single trait corn products to its double stack VT PRO 2, which is in its second year of commercial sales. In Argentina, sales of Monsanto’s Genuity VT Triple PRO, a triple-stack seed corn also in its second year of sales, were expected to account for 40% of its seed corn business. In the United States, Monsanto said it expected its position to again grow in 2013 due to increased area planted to its Genuity Roundup Ready 2 Yield platform in soybeans and Genuity reduced refuge family in corn.
Active seed corn sales early in the season typically are an indication of farmers’ plans to increase or at least maintain planted area. Early analysts’ forecasts call for increased area planted to corn in the United States and in other parts of the world in 2013 due to strong corn prices in 2012.
Overall, Monsanto posted net income of $339 million for the first quarter, equal to 63c per share on the common stock, up 169% from $126 million, 24c per share, in the same period a year ago. Sales in the first quarter totaled $2,939 million, up 21% from a year earlier.
The company raised its full-year ongoing earnings guidance to $4.30@4.40 per share as a result of the strong first-quarter results and expected strong performance going forward.
