By Carey Gillam
Monsanto, the world's largest seed company, raised its full-year profit forecast on Wednesday after reporting a better-than-expected second quarter driven by strength in its global corn business.
Its shares rose nearly 2 percent in premarket trading after the company, a leading developer of genetically engineered corn, soybeans and other crops, said it expects to sell a record amount of corn this year.
Monsanto Co. (MON) said strong demand for its products allowed it to raise its fiscal 2013 earnings forecast by 10 cents a share to a range of $4.40 to $4.50 per share before certain after-tax items. That compares with a target set in January of $4.30 to $4.40 per share.
The outlook for net earnings for the full year was raised to $4.42 to $4.52 a share, up from $4.31 to $4.41.
Monsanto said net earnings were $1.48 billion, or $2.74 a share, in the second quarter, ended Feb. 28, compared with $1.21 billion, or $2.24 a share, a year earlier.
Before certain after-tax items, it earned $2.73 a share, up from $2.28 a year earlier. Analysts were looking for $2.58, according to Thomson Reuters I/B/E/S.
Net sales for the quarter increased 15 percent to $5.5 billion, led by sales of corn seed and genetic traits, which rose more than 16 percent to $3.28 billion. That offset a nearly 2 percent decline in sales of soybean seeds and traits, a 7 percent drop in vegetable seed sales, and a 9 percent slide in cotton seeds and traits.
Monsanto said strong corn sales in Brazil and in the U.S., where farmers are preparing to plant spring crops, drove results.