UPDATE 1-Monsanto raises 2008 outlook, shares pare losses
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NEW YORK, Oct 2 (Reuters) - Monsanto Co (MON.N) raised its fiscal 2008 earnings forecast on Thursday in a bid to alleviate investor fears after a rating downgrade sent its shares down more than 21 percent in early trading.
The herbicide and biotech seed maker expects fiscal 2008 adjusted earnings of about $3.64 a share, up from a previous forecast of $3.58 to $3.60 a share and above Wall Street's expectations of $3.60 a share.
The company's stock, which fell as low as $77.34 a share in early trading, pared losses and had risen to $86.04 by midday on the New York Stock Exchange. But the shares are still 12 percent below Wednesday's closing of $97.84.
Stocks in the agricultural sector began their decline late on Wednesday after fertilizer producer Mosaic announced fiscal first-quarter results short of Wall Street expectations.
Monsanto's stock was hit after Merrill Lynch analyst Don Carson also lowered his rating on the company to "neutral" from "buy."
Carson said the downgrade was due to the uncertainty around the future growth of Monsanto's glyphosate business, which is expected to account for over 40 percent of the company's earnings before interest and taxes in fiscal 2009.
"Our business continues to be strong on all fronts and that's reflected in both our performance and in our confidence in our outlook going forward," Chief Executive Hugh Grant said in a statement. (Reporting by Euan Rocha; Editing by Andre Grenon)
