Monsanto Co., the world's largest seed company, raised its earnings outlook for fiscal 2013 on Tuesday and delivered surprisingly strong first-quarter results, citing growth in Latin America and early U.S. spring seed sales.
Its shares surged nearly 4 per cent in premarket trading after the developer of genetically engineered corn, soybeans, and other crops gave analysts what they had been looking for – a much improved fiscal-year profit outlook.
Monsanto said for fiscal 2013 it now was aiming for $4.30 to $4.40 per share, on an ongoing basis, up from its previous guidance of $4.18 to $4.32 per share. If achieved, it would mark the third straight year of continuing earnings growth.
The guidance still fell shy of analysts' estimates, however. On average, analysts were looking for $4.43 a share for fiscal 2013 guidance, according to Thomson Reuters I/B/E/S.
The outlook for net earnings for the full year was $4.31 to $4.41 per share.
Monsanto said corn seed and trait sales in Latin America and in the United States were key to a total jump in sales of 21 per cent to $2.9-billion for the quarter.
Monsanto chairman Hugh Grant said the company's expansion efforts in Brazil and Argentina were paying off, as new corn products garner the favour of farmers.
U.S. farmers are also helping drive strong sales of corn seed, with early orders for spring planting ahead of last year's pace, Monsanto said. The company expects to see U.S. acreage planted with both its leading corn and soybean products expand this year, officials said.
Over all, the company earned $339-million, or 63 cents a share, versus $126-million, or 23 cents a share, a year earlier.
On an ongoing basis, the company earned 62 cents a share in the first quarter that ended Nov. 30, well above the 37 cents a share expected by analysts.