Monsanto quarterly profit up 71 percent

By Carey Gillam

KANSAS CITY, Missouri (Reuters) - Monsanto Co. (MON.N) shares rose on Thursday after the company reported quarterly earnings jumped 71 percent, largely due to surging sales of its genetically modified corn.

Monsanto said net income rose to $570 million, or $1.03 a share, in its fiscal third quarter ended May 31, from $334 million, or 60 cents a share, a year earlier.

Analysts on average were looking for $1 a share, according to Reuters Knowledge.

St. Louis-based Monsanto said strong demand for its branded corn seed products in the United States, as well as in Italy, France and Germany, contributed to the sharp profit increase.

Farmers are planting more corn this year because of sharply higher corn prices amid demand from the ethanol, food and livestock feed sectors.

"We're delivering this year extraordinary results in an extraordinary year," said Hugh Grant, Monsanto's chairman, president and chief executive. "The demand for biofuels and exports continues to drive expansion in the marketplace," he told a conference call.

The company's shares rose as much as 3 percent in early trade and were up 2.3 percent to $67.51 by late-morning on the New York Stock Exchange.

Monsanto said strong demand for its Bollgard insect-protected cotton technologies in India was also a factor as Indian cotton farmers planting an estimated 13 to 14 million acres of Monsanto's cotton trait technologies in the 2007 growing season, up by about two-thirds from last year.

But increased sales were partially offset by lower U.S. cotton trait revenue as farmers reduced the number of acres planted to cotton, Monsanto said.

Overall, sales for Monsanto's seeds and genomics unit totaled $1.7 billion for the third quarter, up 32 percent from a year earlier.

J.P. Morgan analyst Jeffrey Zekauskas, who has a neutral rating on Monsanto, saw little to push the stock significantly higher, pointing out that the company's bottom line also benefited from a lower-than-expected tax rate and flat research and development spending.

PLANTING FORECASTS

Also on Thursday, Monsanto revised upward its projections for U.S. corn planting, and said it was undertaking a three-year, $610 million capital investment for its U.S. corn production facilities.

It expects glyphosate herbicide-tolerant corn to be grown on about 80 million acres, up from its previous estimate of 60 million acres.

The U.S. Department of Agriculture will issue a June plantings report on Friday. Analysts on average expect total 2007 U.S. corn plantings of 90.6 million acres.