According to latest publications St. Louis-based Monsanto Company(NYSE:MON) posted record earnings results in its 2nd quarter amid indications that U.S. farmers are getting ready to sow record land with soybeans this year.
Monsanto Company(NYSE:MON) said in a statement that profit without one-time items was $3.19 a share in the quarter, topping the highest of 16 analysts’ predictions. Sales surged to $5.07 billion from $4.53 billion year over year, also topping all perditions.
The world’s largest seed company, which is also facing $66 billion takeover bid from Bayer AG, also said full-year profit is now poised to be at the high end of a previously outlook range of $4.50 to $4.90 a share, without one-time items. Monsanto Company(NYSE:MON) restated that it predicts closing of the merger deal with Bayer by end of 2017.
Traditionally revenue-wise 2nd quarter has always been good for Monsanto, reflecting purchasing from Northern Hemisphere farmers as they plant their next crops, plus end-of-season demand from South America. The U.S. is predicting record soybean plantings this year, the government said last week in its final report.
Meanwhile Bottom of Formcorn, soybean and cotton acreage in the U.S. is anticipated to be 2.2% up in 2017, which is upbeat for Monsanto, Don Carson, an analyst at Susquehanna Financial Group, said in a note before the earnings. The company is also seeing higher sales in North America of Roundup Ready Xtend, its latest genetically modified soybean seed, while benefiting from expanding corn and soy acreage in South America.
Other encouraging factors Monsanto Company(MON) highlighted during the announcement were that company’s growth have surpassed 25% for its worldwide soybean gross profits. The company has also increased its estimate for U.S. acreage for its new Roundup ready 2 Xtend soybeans to 18 million acres from 15 million previously. Meanwhile rising demand for cotton seed, which it says will help gross profit from the cotton segment surged more than 35%.