Monsanto's New Seeds Sell Well -- WSJ
05 October 2017 - 6:02PM
Dow Jones News
Company rides out tough farm economy, as regulators review its
takeover by Bayer
By Austen Hufford
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 5, 2017).
Continued adoption of Monsanto Co.'s latest soybean, cotton and
corn products drove quarterly revenue for the seed giant in what it
called a challenging agricultural environment.
Last month, forecasters said this year's U.S. harvest will be
larger than expected, setting up farmers for another year of low
prices.
Monsanto said Wednesday that its sale to German chemical
conglomerate Bayer AG was progressing. Bayer's $57 billion deal to
create the world's largest supplier of pesticides, seeds and crop
genes is expected to close early next year, pending regulatory
reviews.
In light of the deal, Monsanto said it wouldn't provide
financial guidance for the fiscal year that began last month.
Monsanto has been introducing soybean varieties that are
genetically engineered to resist a more powerful combination of
herbicides. The company said more than 20 million U.S. acres were
sown with the new seeds in its just-ended fiscal year and that it
is anticipating demand for 40 million acres across next year's
planting season.
Monsanto's new soybean variety, engineered to resist the
herbicide dicamba as well as glyphosate, has been linked to crop
damage in parts of the southern U.S. Farmers in Arkansas, Missouri,
Mississippi, Tennessee and other states have reported an estimated
3 million acres of crops allegedly damaged by dicamba drifting from
neighboring fields. Some farmers have sued Monsanto.
The St. Louis-based company said it would provide "enhanced
training" to farmers and dispense specialized spray nozzles at no
cost. It is also adding incentives for farmers to use a new version
of the spray that it maintains is more reliable.
For its fiscal fourth quarter ended Aug. 31, Monsanto reported
profit of $20 million, or 5 cents a share, compared with a loss of
$191 million, or 44 cents a share, a year earlier. Revenue grew
4.8% to $2.69 billion, contributing to an 8.4% rise for the full
year.
On an adjusted basis, quarterly earnings were 20 cents a share;
on the same basis, analysts were expecting a loss of 41 cents.
Monsanto said the better-than-expected results were due to tax
benefits and a pretax boost of $200 million from corn licenses in
Brazil.
Still, Monsanto predicts lower planted corn acres in Brazil as
well as challenging corn prices globally.
For cotton, the company saw its latest seed varieties reach more
than 6 million acres amid increases in both the U.S. and
Australia.
--Jacob Bunge contributed to this article.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 05, 2017 02:47 ET (06:47 GMT)
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