planted the seeds of optimism when it raised guidance recently, and that forecast has now grown to fruition.
A strong growing season in the U.S. boosted Monsanto's third-quarter earnings by 45%, with the agribusiness giant matching Wall Street expectations.
Monsanto Wednesday morning announced third-quarter net income of $252 million, or 93 cents a share, well above the year-ago profit of $174 million, or 66 cents a share. Excluding all items, the company earned 85 cents a share, in line with the Wall Street estimate.
Revenue came in at $1.68 billion, a 14% increase over the year-ago $1.49 billion and well above the $1.53 billion expected by Wall Street. Monsanto said the increase was due to strong international sales of its Roundup herbicide and higher sales of traits and seeds in the U.S. market.
"It has been a good year for agriculture. But it's also been a good year for Monsanto because the strategy we have put in place is working," said Hugh Grant, company chairman, CEO and president. "We continue to be impressed by the strong performance from our seed and trait business."
Research and development costs for the quarter came in at $128 million, up 9% year over year, while selling, general and administrative costs came in at $291 million, down 3% year over year.
The company's seed and genomics business showed strength with sales of $681 million, up 11% from last year, driven by higher revenue from corn and soybean traits.
Monsanto's agricultural productivity business, which includes Roundup and other crop protection products, had $998 million in sales, a 17% increase from last year, driven by a 27% jump in sales of herbicides.
Going forward, the company said the growth would continue, reaffirming the 2004 guidance it established on June 21.
"Even as we've been able to increase our earnings expectations, creating a higher base, we believe the growth opportunity in our seeds and traits business will allow us to meet our target of compounded annual growth of 10% for EPS from ongoing business in fiscal years 2005 and 2006 from our fiscal year-end 2004 base," Grant said.