Monsanto Reports Companywide Gains for First-Quarter 2011 as U.S., Latin American Markets Grow

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Researched by Industrial Info Resources (Sugar Land, Texas)--Agricultural technology and product leader Monsanto Company (NYSE:MON) (St. Louis, Missouri) reported strong gains for the first quarter of fiscal year 2011 as all of the company's major businesses saw improvements in sales and profits, especially Australian cotton and Latin American corn and soybeans. Net income for the quarter was reported to be $6 million, compared to a net loss of $19 million in the first quarter of fiscal year 2010.

Net sales stood at $1.83 billion, a 7.84% increase from the same period last year. The Seeds and Genomics segment, which consists of Monsanto's seed and trait products, benefited from growth in the Latin American seed business, particularly in Argentina and Brazil, and an increase in U.S. volumes. The Agricultural Productivity segment, which includes crop protection and lawn-and-garden herbicide products, saw steady gains with Roundup and other herbicide sales, due in part to an early Latin American sales-and-application season.

Also contributing to Monsanto's overall improvement was a 9% decline in selling, general and administrative expenses, which was a result of the company's restructuring in 2010. Research and development expenses jumped 13% as more Monsanto products entered advanced phases of development.

"It was a solid quarter that tracked squarely with our plan, and highlighted the areas that we expect to be key drivers in 2011," said Hugh Grant, the chairman, president and chief executive officer of Monsanto, in a conference call. He added that three things stand out at this point in the year: pipeline progress continues unabated; early orders are showing positive results from a significant shift in pricing and product strategy made last year; and new product platforms are meeting expectations.

Monsanto's Seeds and Genomics segment reported $1.16 billion in net sales, a 12.8% increase from the same period in 2010, while gross profits stood at $679 million, a 13.74% increase:

• The corn seed and traits business reported net sales of $614 million, a 7.91% increase from the same period last year. Gross profits were $339 million, an 11.51% increase.
• The soybean seed and traits business reported net sales of $226 million, a 12.44% increase from the same period in 2010. Gross profits were $153 million, a 10.07% increase.
• The vegetable seed business reported net sales of $183 million, a 5.78% increase from the same period last year. Gross profits were $113 million, a 0.89% increase.
• The cotton seed and traits business reported net sales of $112 million, compared with $59 million in the same period in 2010. Gross profits were $74 million, compared with $33 million.
• All other crop seeds and traits businesses reported net sales of $28 million, a 3.45% decrease from the same period last year. Gross profits saw neither a gain nor a loss, compared with a $9 million gain in first-quarter 2010.

Monsanto's Agricultural Productivity segment reported $667 million in net sales, a 0.15% increase from the same period in 2010, while gross profits stood at $139 million, a 2.11% decrease. The Roundup business accounted for much of the sales gain:

• The business representing Roundup and other glyphosate-based herbicides reported net sales of $523 million, a 2.75% increase from the same period last year. Gross profits were $94 million, an 8.05% increase.
• All other agricultural products businesses reported net sales of $144 million, an 8.28% decrease from the same period in 2010. Gross profits were $45 million, an 18.18% decrease.

Monsanto expects almost all of its earnings for the remainder of the year to be in the second and third quarters. The second is expected to be the largest, with peak U.S. corn and soybean sales, and the third is expected to have the strongest growth from the same period in 2010, with peak U.S. and European sales for Roundup, and peak sales for cotton.

"At this point in the year, you can't really declare victory," Grant said in the conference call. "But you do know if you're off plan, and I'm pleased to say that we've seen all the right indications at this point."

Industrial Info is tracking 13 active Monsanto projects in North America that are worth a total of more than $93 million, including an $8 million addition to a soybean seed distribution facility in West Fargo, North Dakota. The project involves building modifications and the installation of state-of-the-art equipment for plant breeding and biotechnology; packaging; and seed treatments. For more information, visit Industrial Info's North American Food & Beverage Project Database.

View Project Report - 300009576

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