The success of its genetically modified corn variety and expansions in Latin America helped Monsanto (NYSE:MON) report a higher than expected second quarter result on Wednesday.
Net income rose 19 percent to $1.21 billion, or $2.24 a share, from $1.02 billion, or $1.88, a year earlier. The world’s largest seed company also raised its full-year earnings forecast and said it expected to earn $3.49 to $3.54 per share through August — that’s a 10-cent rise from its January forecast. Its fiscal-year forecast for free cash flow also rose, and is now projected to be between $1.6 billion and $1.8 billion.
The modified SmartStax corn, which can tolerate herbicides and kill bugs, has been selling well as the warm temperatures weather encourage more farmers to plant crops. This year’s corn crop will be the biggest in 75 years, according to the Department of Agriculture. Farmers are expected to plant almost 96 million acres of corn, a 4.3 percent increase from last year.
Monsanto’s seed and genetic license sales rose 15 percent and gross profit from the unit went up 17 percent despite a decline in vegetable seed demand in Europe.
“Our strong U.S. selling season and growth from Latin America during the first six months have come together to set us up for a great 2012,” CEO Hugh Grant said in a statement.
To contact the reporter on this story: Aabha Rathee at firstname.lastname@example.org
To contact the editor responsible for this story: Damien Hoffman at email@example.com