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(Reuters) - Monsanto Co (MON.N), the world's largest seed company, reported higher-than-expected quarterly earnings on Wednesday as a rise in herbicide sales offset a decline in its corn business.
The company also said it was making fast progress on more than two dozen new projects and was laying the groundwork for an extension of its precision farming platform, which uses data and technology to prescribe production tools for individual farmers.
Shares of Monsanto were up 2.3 percent at $115.44 in afternoon trading.
Analysts lauded the company's performance, saying it reflected a good balance of high-margin herbicide sales and advances in the seed businesses.
"The ag productivity segment carried the day this quarter in terms of where most of the earnings growth came from," said Edward Jones analyst Matt Arnold. "But the seed business did fine ... They are intelligently focusing on where they can win."
Monsanto, which develops genetically engineered corn, soybeans and other crops and sells the popular Roundup herbicide, said it was seeing strong early seed orders for spring planting in the United States. Farmers are expected to plant more soybeans this year and devote fewer acres to corn as part of a routine rotation, Monsanto officials said.
The company said it had notched a record 29 "phase advancements" across several research and development platforms, and signed a deal with a large U.S. agricultural retail distributor to expand its new precision farming system products.
Monsanto noted that it was advancing development of an herbicide-tolerant wheat, pushing what would be the world's first biotech version of the grain a step closer to market. It is also progressing on work to make crops more drought-hardy and more pest- and disease resistant.
The company is working on a new combination of biotech crops and herbicide chemistry to control weeds that have become resistant to its Roundup herbicide.
Environmental experts and others have criticized Monsanto's request for regulatory approvals for that new "Xtend" herbicide-tolerant cropping system, saying it would contribute to increased weed resistance over the long term.
But Monsanto said Wednesday that recent regulatory progress by a competitor on a similar system was an encouraging sign for its own sought-after approval.
In the first quarter ended November 30, the company's net sales rose nearly 7 percent to $3.14 billion from $2.94 billion a year earlier, even as sales of corn seeds and specialized genetic traits for corn fell 7 percent to $1.05 billion.
Sales of cotton seeds and traits slumped 26 percent to $137 million, but soybean sales surged 16 percent to $267 million.
In the agricultural productivity segment, which includes Roundup herbicide, sales jumped 24 percent to $1.5 billion.
Net income rose to $373 million, or 69 cents per share, from $349 million, or 63 cents per share, a year earlier.
The profit of 67 cents a share from continuing operations was 3 cents higher than the analysts' average estimate, according to Thomson Reuters I/B/E/S.
The company affirmed its fiscal-year earnings forecast of $5.00 to $5.20 a share from continuing operations and $5.02 to $5.22 including income from discontinued operations.
Monsanto officials said they still expected free cash flow of $600 million to $800 million for 2014.
Reporting by Carey Gillam in Kansas City; Editing by Jeffrey Benkoe, Bernadette Baum and Lisa Von Ahn