Monsanto Results Boosted by Soybean Seeds and Traits Business -- Update
29 June 2017 - 2:26AM
Dow Jones News
By Jacob Bunge
Higher soybean plantings in the U.S. this spring boosted biotech
seed giant Monsanto Co.'s quarterly profit, despite the broader
slump in agricultural commodity prices.
Farmers this year have dedicated more acres to soybeans after a
string of record-breaking harvests have eroded the price of widely
grown crops like corn and wheat. Soybean prices had fared better
due to strong demand from China and elsewhere, though prices have
declined as farmers ramped up planting. Heavy rain this spring also
forced some farmers to switch some corn fields to soybeans, which
typically can be planted later.
That trend coincided with Monsanto's introduction of new soybean
varieties that are genetically engineered to resist a more powerful
combination of herbicides. About 20 million U.S. acres were sown
with the new seeds, executives said Wednesday.
"For soybeans, the momentum continues to be tremendous,"
Monsanto President Brett Begemann said, as the St. Louis-based
company reported better-than-expected profit for the period.
Chief Executive Hugh Grant said Monsanto's sale to German
chemical conglomerate Bayer AG was progressing through antitrust
reviews around the world. The $57 billion deal to create the
world's largest supplier of pesticides, seeds and crop genes is
expected to close this year, he said.
Some jurisdictions already have cleared the deal. South Africa
required Bayer to sell a herbicide and crop gene franchise that
competes with Monsanto's "Roundup Ready" suite of crops and weed
killers as a condition of the deal.
A 29% increase in quarterly sales for soybean seeds and crop
genes prompted Monsanto on Wednesday to maintain its forecast
earnings of $4.09 to $4.55 a share for its fiscal year, which wraps
up Aug. 31. Shares climbed 0.9% to $118.36.
Monsanto's new soybean variety, engineered to resist the
herbicide dicamba as well as glyphosate, has also been linked to
crop damage across some portions of the southern U.S. A growing
number of farmers in Arkansas, Missouri, Mississippi and Tennessee
have reported crop damage allegedly caused by dicamba drifting from
neighboring fields. Some farmers have sued Monsanto.
The company has said it advises farmers on how to use the spray
safely and will fight the lawsuits.
For the quarter Monsanto reported income of $843 million, or
$1.90 a share, up from $717 million, or $1.63 a share, a year ago.
Revenue from seeds and genomics, Monsanto's biggest business, fell
2.3% to $3.1 billion despite strong results from the soybean seed
segment.
Ezequiel Minaya contributed to this article.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
June 28, 2017 12:11 ET (16:11 GMT)
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