Monsanto quarterly profit beats views

By Carey Gillam

KANSAS CITY, Missouri (Reuters) - Shares of Monsanto Co (MON.N) rose more than 16 percent on Wednesday after the company reported much higher-than-expected quarterly profit and raised its full-year outlook, citing increased demand from Latin America and strong early sales for the new U.S. planting season.

Monsanto, the world's largest seed company, and a developer of genetically altered corn, soybeans and cotton, said net income rose to $556 million, or $1 a share, in the first quarter that ended November 30, from $256 million, or 46 cents a share, a year earlier.

The results included earnings of 2 cents a share from continuing operations and a tax-related gain of 8 cents.

Analysts on average were expecting profit of 59 cents a share before special items, according to Reuters Estimates. It was not immediately clear which items were excluded.

Net sales rose 29 percent to $2.6 billion.

Morningstar analyst Ben Johnson said the results were surprisingly strong, particularly in light of signs that farmers may be cutting back on inputs such as Monsanto's herbicide products due to economic concerns.

"Monsanto seems to have bucked what has been a negative trend," Johnson said.

STRENGTH IN HERBICIDES

For the first quarter, St. Louis-based Monsanto said strong demand in Brazil for Roundup and other glyphosate-based herbicides led sales increases.

First-quarter results were also boosted by a 31 percent jump in soybean sales from a year earlier, and vegetable seeds' net sales that grew by 21 percent, thanks largely to acquisition in June of Netherlands-based De Ruiter Seeds, Monsanto said.

Monsanto stock was up more than 16 percent at $85.05 in afternoon New York Stock Exchange trading.

Investor enthusiasm was partly tied to the company's announcement on Wednesday that it had submitted a request for U.S. regulatory approval for a drought-tolerant corn that it hopes to roll out in conjunction with BASF Plant Science by 2012. Markets around the world are clamoring for this technology as rival technology companies race to commercialize such crops.

"That could be could be a strong growth driver. It is something investors are pointing to in terms of keeping that sustainable growth," said Brian Hicks, co-manager of Global Resources Fund PSPFX.O, part of U.S. Global Investors Inc.

In all, Monsanto laid out a pipeline of products expected to substantially boost revenues and global market share by 2020.

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