Printer Friendly

Monsanto earnings disappoint analysts.

Byline: Matthew Perrone

WASHINGTON -- Monsanto reported lower-than-expected earnings as slumping corn prices push farmers toward other crops, crimping sales of the company's best-selling biotech corn seeds.

The St. Louis agricultural business giant reported a second-quarter profit of $1.42 billion, or $2.92 per share, down from $1.67 billion, or $3.15 per share, in the prior year period. Sales slid to $5.2 billion from $5.8 billion.

Analysts surveyed by Zacks Investment Research predicted earnings of $2.96 per share on sales of $5.76 billion.

Monsanto's biotech seeds have genetically engineered traits that help farmers increase their crop yield, despite their higher costs.

U.S. farmers are expected to plant fewer acres of corn for the third consecutive year in 2015, down 2 percent from last year, according to survey figures from the U.S. Department of Agriculture. More farmers are favoring soybeans because they cost less to grow and prices farmers receive for soybeans haven't fallen as quickly as corn. Soybeans also can withstand weather variations.

In a conference call, company executives said soybean demand is growing by more than 200 million bushels per year and Monsanto is set to take advantage with expanding varieties. It expects to penetrate 30 million acres in South America in 2016.

The positive outlook for soybean growth in South America and the U.S. helped push the company's stock higher, despite the profit miss. Shares of Monsanto Co., which have declined roughly 6 percent since the beginning of the year, rose $2.15, or 1.9 percent, to $114.69 in afternoon trading Wednesday.

Monsanto's total seed and seed license revenue declined to $4.18 billion from $4.65 billion mainly due to lower sales of the company's best-selling product, biotech corn seeds.

COPYRIGHT 2015 Worcester Telegram & Gazette
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2015 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business
Author:Perrone, Matthew
Publication:Telegram & Gazette (Worcester, MA)
Date:Apr 2, 2015
Words:294
Previous Article:McDonald's: Workers to get pay hikes at 15,000 stores.
Next Article:Search, social & shopping; As Pinterest turns 5, it's unique and massively popular.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters