Monsanto sales flat in Q3 FY2013

By CnAgri Print

Monsanto’s sales were up by just 0.7 % to $ 4,248 million in the third quarter ended May 31, 2013, due to the Brazil soybean business, a decrease in overall planted cotton acres and continued effect of higher production costs from the 2012 drought. The third quarter net income dropped by 3.0% to $ 909 million compared with the same period of previous year. For the nine months of the year, sales rose by 11.0% to $ 12,659 million, which was driven by the strength across its global portfolio, including overall growth in the company's global corn business and continued strength in the agrochemicals segment. The net income for the nine-month increased by 20.1% to . $ 2,731 million. EBIT (earnings before interest & taxes) for the third quarter decreased by 7.5% to $1,204 million and for nine-month boosted by 14.5% to $3,790 million. Company executives noted that the continued strength and global scope of its core business, coupled with new products and upgrades, are expected to propel the company to mid-teens ongoing earnings growth in fiscal year 2014.

"This is a year where the strength of our global portfolio has really been highlighted, and with the continued strength of our larger, more global business, we're on track to deliver more than 20 % ongoing earnings growth in fiscal year 2013 and in a very strong position to build on that success with continued growth next year," said Hugh Grant, chairman and chief executive officer. 

Sales in the Seeds and Genomics segment were down by 2.4% to $ 3,054 million in the third quarter ended May 31, 2013. For the nine months of fiscal year 2013, sales for the segment were up by 6.6% to $ 9,155 million over the same period last year.

Monsanto's global corn business continues to lead the segment performance this fiscal year. The company anticipates achieving record total corn volumes for the third consecutive year with the trend continuing into fiscal year 2014. Performance to date within corn has been driven by upgrade improvement across its corn portfolio in key seed geographies, including strong growth and contribution from its international businesses.

In Latin America, corn trait adoption and product upgrades continue to accelerate, with VT PRO™ 2 reaching nearly one-third of the company's branded portfolio in Brazil in its second year of commercial sales and Genuity® VT Triple PRO® comprising about 40 percent of the company's Argentine corn portfolio this season. In the United States, the company confirmed it is on track to come in at or above the high end of its 36 million to 38 million acre target range for its Genuity® reduced refuge family.

Within soybeans, Monsanto noted it is positioned well to be at or above the high end of its 39 million to 41 million acre target range for its Genuity® Roundup Ready 2 Yield® platform in the United States. The company also confirmed that final results from its second year of Intacta RR2 PRO™ Ground Breakers® on-farm field trials at more than 1,000 locations in Brazil demonstrated a greater than four bushel per acre yield advantage against first-generation Roundup Ready® soybeans. With the final key regulatory approval secured, Monsanto's commercial preparation for the full-scale launch of Intacta RR2 PRO™ soybeans in Brazil for the upcoming season is underway. Intacta RR2 PRO™ soybeans are expected to become one of the cornerstone products in Monsanto's next-generation soybean platform, representing one of the most significant growth drivers in its global portfolio. The company said it is targeting around three million acres for the launch of Intacta RR2 PRO™ soybeans this upcoming growing season in Brazil.

Monsanto’s agrochemical sales rose by 9.4% to $1,194 millionin in the third quarter ended May 31, 2013 ,for the nine months of the year, the sales were up by 24.3% to $3,504 million compared with the same period of previous year.

Year-to-date performance of the Seeds and Traits segment is complemented by the continued strength of the company's agrochemicals segment due to the positive market environment and focused business strategy.

Out look

Monsanto anticipates “mid-teens” earnings growth for fiscal year 2014. "Our optimism reflects the expanding opportunity we see to unlock successive layers of growth next year and beyond as our focus on farmers, new product platforms and operating efficiency combine to build continued momentum." said Hugh Grant, chairman and chief executive officer.