Monsanto posts quarterly loss as corn seed sales fall

Wed Oct 3, 2012 6:24pm EDT

Michael Doane, Monsanto's wheat industry affairs director, looks at growth in a wheat field in an undisclosed location in North Dakota in this undated file photo. Monsanto shares fell 2.2 percent to $88.59 after the agribusiness group posted a fourth-quarter loss during a seasonally sluggish sales period. REUTERS/Carey Gillam/Files

Michael Doane, Monsanto's wheat industry affairs director, looks at growth in a wheat field in an undisclosed location in North Dakota in this undated file photo. Monsanto shares fell 2.2 percent to $88.59 after the agribusiness group posted a fourth-quarter loss during a seasonally sluggish sales period.

Credit: Reuters/Carey Gillam/Files

(Reuters) - Monsanto Co (MON.N) posted a bigger quarterly loss for a typically weak quarter on Wednesday, and the global agribusiness group offered a conservative outlook for its new fiscal year.

Shares of Monsanto, the world's largest seed company and a developer of genetically engineered corn, soybeans, and other crops, fell more than 1 percent after it did not raise its fiscal 2013 earnings forecast.

Monsanto said it still expected a fiscal-year profit of $4.18 to $4.32 per share, but analysts were looking for it to boost its outlook to $4.38, according to Thomson Reuters I/B/E/S.

Wells Fargo analyst Frank Mitsch called the fiscal fourth quarter, which ended on August 31, "relatively unimportant." Generally the period is when farmers in the United States, the company's anchor market, are harvesting corn and soybean crops and not yet ramping up seed purchasing for next year.

Despite its conservative earnings forecast, Monsanto officials said the outlook was very bright, particularly for the company's specialized corn seeds and traits, which include a new drought-tolerant variation.

"Corn is the driver for Monsanto," said Chief Executive Officer Hugh Grant.

Monsanto said it was raising corn seed prices by 5 percent to 10 percent for the next planting season, and it forecast U.S. corn acres at about 96 million in 2013 after similarly aggressive planting in 2012.

The company said it expected seed sales to be strong this quarter as more farmers buy earlier than normal.

Officials reported 1 point share gains in 2012 in both branded corn and branded soybean sales.

Growing international demand for seeds and traits complemented the company's base business in the United States, executives said in a call with analysts.

Latin America is a key driver of international sales, Begemann said on the call, and the profit margin for corn seed sales there is expanding.

Overall sales of corn seeds and traits dropped 12 percent in the fourth quarter from a year earlier, and cotton sales were off 84 percent. Meanwhile, soybean sales jumped 48 percent, and vegetable seed sales rose 26 percent.

The company said its fourth-quarter net loss had doubled to $229 million, or 42 cents a share, from $112 million, or 21 cents a share, a year earlier.

Excluding a restructuring charge, the loss was 44 cents a share.

Analysts on average were expecting a loss of 42 cents a share, according to Thomson Reuters I/B/E/S.

Earnings growth before special items hit 25 percent in fiscal 2012, Monsanto said, but it forecast an increase at a mid-teens percentage rate for 2013.

Revenue for the quarter fell to $2.11 billion from $2.25 billion on a decline in corn seeds and trait sales.

Shares of Monsanto were down 1.4 percent at $89.26 in morning trading.

(Reporting By Carey Gillam; Editing by Gerald E. McCormick, Jeffrey Benkoe and Lisa Von Ahn)

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