Soaring seed business lifted Monsanto's Q3 sales

Date:06-29-2012

The continued momentum of seeds and traits business through key seed selling seasons drove Monsanto’s sales to $4.219 billion, up by 16.9% compared with last year in the third quarter of fiscal year of 2012 which ended May 31st. Third quarter gross profit rose 20 percent to $2.3 billion compared to the prior year third quarter. For the nine-month of the year, sales increased by 19.1% to $11.406 billion compared to the same period of last year. EBIT (earnings before interest & taxes) for the third quarter rose 33.4% to $1.301 billion and for nine-month boosted by 33.2% to $3.311 billion.

Monsanto’s sales result ($ million)
Q3 ended May 31st	Q3 2012	Q3 2011	change%	Nine-month of 2012	Nine-month of 2011	change%
Sales	4,219	3,608	+16.9	11,406	9,575	+19.1
-seeds & traits	3,128	2,647	+18.2	8,586	7,231	+18.7
-agrochemicals	1,091	961	+13.5	2,820	2,344	+20.3
EBIT1	1,301	975	+33.4	3,311	2,485	+33.2
-seeds & traits	1,111	880	+26.3	2,957	2,263	+30.7
-agrochemicals	190	95	+100.0	354	222	+59.5
Net income	937	692	+35.4	2,274	1,719	+32.3
1 earnings before interest & taxes

Sales of the company’s Agricultural Productivity segment which consists of the crop protection products and lawn-and-garden herbicide products in the third quarter increased by 13.5% to $1.091 billion over the same period last year due to higher-than-expected sales across the company's chemistry portfolio, including its Roundup®, lawn-and-garden and selective herbicides businesses.

Sales for Monsanto's Seeds and Genomics segment which consists of the company's global seeds and related traits business in the third quarter of fiscal 2012 increased 18.2% to or $3.128 billion over the prior year period supported by strong sales across its U.S. corn and soybean portfolios. For the first nine months, gross profit in the segment is up approximately 20% over the same period last year.

In the U.S. market, continued sales momentum carried from the early spring throughout the planting season and an increase in planted acres of corn across the country helped deliver a record seed sales volume season for the company. In 2012, the company achieved continued strong adoption of its latest innovations, with its Genuity® Roundup Ready 2 Yield® soybeans projected to be on close to 30 million acres and its Genuity® reduced refuge corn family projected to be on more than 25 million acres this year in the United States.

The successful U.S. season was complemented by strong performances in key international markets, including Europe and Latin America. In Latin America, strong continued performance in Brazil was driven by an increase in total acres, mix improvement and higher-than-anticipated overall sales.  In the Northern hemisphere, core business growth and expanded acres helped drive better-than-expected performance in Eastern Europe.

Outlook

Hugh Grant, Monsanto's chairman, president and chief executive officer said, "We've achieved excellent business results this year, but more importantly we've continued to receive positive response to our products from farmers. As I look to 2013 and beyond, I am confident as our momentum is now validated with sustained business results and I believe the opportunity ahead for our customers, our business and our owners is significant."

The company confirmed 2012 earnings per share guidance in the range of $3.65 to $3.70 on an ongoing basis, with mid-teens ongoing earnings growth for fiscal year 2013 projected from the base of $3.65 to $3.70. The company expects 2012 earnings per share on an as-reported basis to be $3.73 to $3.78. The company also reaffirmed its previously announced full-year free cash flow guidance for fiscal year 2012 in the range of $1.7 billion to $1.8 billion. The company expects net cash provided by operating activities to be $2.7 billion to $2.9 billion, and net cash required by investing activities to be $1 billion to $1.1 billion for fiscal year 2012.