Monsanto Co (MON.N), the world's largest seed company, reported a higher-than-expected quarterly profit on Wednesday as sales remained on an upswing and pricing improved for the company's herbicide business.
The leading developer of genetically engineered corn, soybeans and other crops said it still expected more than 20 percent growth in fiscal-year ongoing earnings, which exclude certain after-tax items.
Monsanto said it was on track to achieve record volume sales of corn seed for the third consecutive year as it expands in Latin America.
Sales of corn seed and traits rose 3 percent in the third quarter ended on May 31, and the much smaller vegetable seed business' sales were up 11 percent.
The results got a boost from Monsanto's agricultural productivity unit, which includes crop protection and lawn-and-garden herbicide products like Roundup weedkiller. Sales at that segment increased 9.4 percent to $1.19 billion on higher prices for its glyphosate-based herbicide.
"It's a company that is hitting its marks," said Edward Jones materials analyst Matt Arnold.
But shares of Monsanto were down 0.2 percent at $101.25 in early trading.
Arnold said much of the better-than-expected performance was attributable to an improved pricing environment for the herbicide business, not the core business of seeds and traits.
The gains in certain business lines were offset by declines in the company's soybean business in Brazil and in cotton plantings, Monsanto officials said.
Operating expenses rose 1.1 percent to $1.02 billion, and research and development expenses increased 5 percent to $392 million.
Overall, the company earned $909 million, or $1.68 a share, in the third quarter, compared with $937 million, or $1.74 a share, a year earlier.
Excluding the cost of resolving a tax matter, earnings increased to $1.66 a share from $1.63. Analysts on average were expecting $1.60, according to Thomson Reuters I/B/E/S.
Sales rose to $4.25 billion from $4.22 billion.
Monsanto said it still expected 2013 earnings per share of $4.50 to $4.55 before special items, with net income of $4.54 to $4.59.
(Reporting by Carey Gillam; Editing by Lisa Von Ahn)