* Raises 1st qtr guidance, holds full-year steady
* Free cash flow seen unchanged
* Results slated for release Jan. 5
* Shares down 2 pct
By Carey Gillam
Dec 7 Monsanto Co. raised its outlook
for first-quarter earnings on Wednesday, helped by strength in
its seed businesses in Brazil and Argentina.
Shares in the agribusiness giant fell 2 percent, however,
as the company said it was not raising full-year guidance, and
concerns about the company's insect-resistant corn product
The company has been dogged by farmer complaints that pests
that are supposed to be controlled by its biotech corn are
instead becoming resistant to the corn's embedded insecticide
in at least four U.S. states. EPA last month criticized the
company for inadequate monitoring of the situation and has
demanded the company improve its practices.
Still, Monsanto on Wednesday reaffirmed that early orders
of corn and soybean seeds for U.S. spring planting are strong.
Then company said it expects first-quarter ongoing and
as-reported earnings per share in the range of 15 to 20 cents a
share, up from the previous guidance of the high end of the 10
to 15 cents range.
SOUTH AMERICA BOOSTS EARNINGS
Though North American seed sales are a factor, and cotton
sales in Australia also helped improve results, first quarter
earnings are getting a large boost from rapid trait penetration
of its biotech seed products in South America, Monsanto said.
First quarter results for the company are typically driven
primarily by the performance in Brazil and Argentina, where
corn and soybeans recently were planted for harvest in early
Chinese demand for soybeans and increasing global corn
demand for livestock feed and biofuels are underlying
supportive factors that have been driving seed product demand
for Monsanto and its rivals.
Despite the stronger expected first quarter, the company
did not alter is full-year guidance, reaffirming a range of
$3.34 to $3.44 per share for fiscal 2012. Cash flow guidance
was unchanged with free cash flow in the range of $1.3 billion
to $1.5 billion for fiscal year 2012.
Monsanto updated its vegetable business as well on
Wednesday and said it expects to expand the business globally
with a focus on seven key crops. Tomatoes, peppers, cucumbers,
onions, melons, broccoli, and lettuce should deliver 80 percent
of net sales growth for the unit, Monsanto said.
In 2012 the company is planning the launch of its first
biotech sweet corn and a "downy mildew-resistant" cucumber.
On Monday Monsanto approved a quarterly dividend on its
common stock of 30 cents per share, related to the first
quarter of the company's 2012 fiscal year.
Monsanto will announce first-quarter results on Jan. 5.
Shares were off more than 2 percent at $70.86 in afternoon