Monsanto sales up 7% in Q1 FY 2014

Monsanto’s sales posted a 6.9% increase to $ 3,143 million in the first quarter of FY 2014 ended Nov 30, 2013. Agrochemical sales rose by 23.9% to $1,467 million, reflecting the continued benefit of a favorable marketplace environment. Net income for the quarter grew by 8.6% to $368 million.

Monsanto’s sales result ($ million)
Q1 ended Nov 30	Q1 2014	Q1 2013	Change%
Sales	3,143	2,939	+6.9
-Seeds & traits	1,676	1,755	-4.5
-Agrochemicals	1,467	1,184	+23.9
EBIT1	554	490	+13.1
- Seeds & traits	104	220	-52.7
- Agrochemicals	450	270	+66.7
Net income	368	339	+8.6
1 earnings before interest & taxes

Sales in seed and trait sales dropped by 4.5% to $1,676 million year-on-year, while the company achieved growth in its soybean business and strong corn portfolio upgrades, including expected trait upgrades across its Latin American portfolio. Those results were balanced against the expected decrease in corn acres in Latin America, some acre and timing effects related to cotton in Australia, and a more normalized U.S. sales contribution pattern after the step up from last year's accelerated season.

Corn trait upgrade and expansion was also on track in both Brazil and Argentina where the company achieved strong demand for its newest corn products. Complementing the trait upgrade and expansion in corn, Monsanto noted that with the South America summer acres planted the company is expecting to reach three million acres in its launch of Intacta RR2 PRO™ soybeans. The company is focused on making sure farmers have a good experience with the product in its initial launch year and preparing for what it expects will be its fastest ramp up of any soybean product.

Monsanto also announced it has entered a memorandum of understanding with one of the company’s largest distribution partners and the largest U.S. agricultural retail distributor, WinField, to explore connections between Monsanto’s Integrated Farming Systems® and The Climate Corporation portfolio with Winfield’s industry-leading R7® Tool, with integrated Satellite Imagery Technology licensed from Geosys, for precision farming. The joint work would represent a first-of-its kind opportunity on new technology for precision agriculture and the development of new broad decision-support tools to help farmers produce more food with fewer resources.

Outlook

In fiscal year 2014, Monsanto continues to expect strong operational growth from its core business, reflected in mid-to-high teens growth in EBITDA. It backed its fiscal year 2014 earnings per share outlook of $5.02 to $5.22 per share.

The company also highlighted a record 29 phase advancements across its research and development (R&D) platforms, including breeding, biotechnology, and new breakthrough areas such as Integrated Farming Systems® and agricultural biologicals.