Monsanto 4th quarter profit up as corn, soy seed sales jump

CHICAGO, Oct 4 (Reuters) – Monsanto Co, which is being acquired by Bayer AG , reported a quarterly profit of US$20 million, compared with a year-ago loss of $191 million, as seed licensing deals in the typically low-revenue fourth quarter lifted sales.

Monsanto shares were up slightly at $119.88 after earlier touching a more-than-two-year high.

Sales of corn seed and traits, Monsanto’s biggest segment by revenue, rose nearly 16 percent while soybean seed and traits sales climbed 22 percent in the quarter ended Aug. 31. Overall net sales for the company were up 4.8 percent at $2.68 billion, above estimates for $2.53 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to Monsanto was $20 million, or five cents per share, in the fourth quarter ended Aug. 31, compared with a net loss of $191 million, or 44 cents per share, a year earlier.

Monsanto typically books the majority of its annual sales during the second and third quarters when farmers in North and South America, which account for more than three-fourths of total sales, buy seeds and other crop inputs.

“Usually this is a quarter that falls between planting seasons and because of that you typically you see a small loss. But they were able to get some nice licensing deals across the table,” said Matt Arnold, analyst with Edward Jones.

The higher sales came despite continued belt-tightening by farmers amid slumping commodity prices and a global oversupply of grain following four years of bumper crops.

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Investors remain focused on the $128-per-share Bayer deal that is expected to close in early 2018.

The deal, if final regulatory approvals are won, would create a company commanding more than a quarter of the world market for seeds and pesticides.

The companies have made all key regulatory filings and secured approval from a third of those regulators, said chief executive Hugh Grant.

A unit of Brazil’s competition regulator Cade said the takeover could affect competition and recommended “structural solutions” as a condition for final approval. Grant called it a “normal step” in the review process.

The company is also facing a barrage of lawsuits over the launch of dicamba-tolerant soybean seeds, known as Xtend soybeans. Dicamba herbicide has been blamed for moving off target and damaging crops that are unable to tolerate it, prompting calls for tighter restrictions on its use.

Monsanto expects U.S. plantings of Xtend soybeans to double next year to 40 million acres.

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  • Denise

    Monsanto is also facing an increasing barrage of lawsuits over Roundup blamed for destroying the lives of farm families with family members sickened or dying from non-Hodgkins lymphoma.

    • Harold

      You are correct. There are multiple class action and multiple individual lawsuits all across the United States. The class action Lawsuits are seeking compensation for monetary losses due to product misrepresentation ( fraud- not personal injury) and the individual lawsuits are seeking compensation for non-Hodgkins lymphoma. (personal injury – cancer) They are all using Monsanto’s very own classified documents which Monsanto was forced to release. Unbelievably, the world didn’t learn anything about Monsanto in the last go-around of PCBs and we need to learn the lesson again. He was a wolf in sheep clothing the first time and now he’s a wolf giving birth to sheep.

      • ed

        Bribing people at the FDA and the CFIA helped get those products to market and thus aid in the increased incidence of non-hodgkins diagnosis numbers. Not new stuff here.

    • ed

      Yep, lots dying from that one.