Global agribusiness Monsanto Co (MON.N) reported stronger-than-expected sales on Wednesday, outweighing news that it is restating financials for prior periods amid an ongoing regulatory probe into its Roundup business.
Monsanto shares were up 3.8 percent as analysts cheered robust U.S. and Latin American sales and a smaller-than-expected fourth-quarter loss by the world's largest seed company. Total sales for the quarter hit $2.2 billion, well above analysts' estimates for $1.89 billion.
"It was a really good quarter," said Jeff Windau, industrial analyst for Edward Jones. "They delivered on what they were focused on doing."
The company's reassurance that the restatements of 2009, 2010 and prior 2011 quarters will leave total revenues essentially unchanged, though with different timing, pleased analysts, though they noted that the Securities and Exchange Commission investigation is continuing.
Monsanto said the restatement involves the timing of accruals related to customer incentives for its glyphosate business. Glyphosate is the key ingredient in Monsanto's Roundup herbicide and once was a key driver of revenues. But the company has struggled with stiff competition in recent years.
The company has revamped product offerings and pricing as part of a larger restructuring of its business and an effort to bolster growth.
But Windau said glyphosate competition remains a headwind for Monsanto and one reason he has a "hold" on the company's stock.
Monsanto said the potential impact of the restatements would affect fiscal year 2009 earnings per share by a loss of 5-10 cents and impact earnings per share for fiscal year 2010 by approximately a loss of 2 cents to a gain of 3 cents. Fiscal year 2011 earnings per share of $2.96 includes 5 cents a share of incremental benefit from the accounting adjustment, Monsanto said.
For the fourth quarter, Monsanto posted a fourth-quarter net loss of $112 million, or 21 cents a share. The loss from continuing operations was 22 cents a share. On that basis, analysts had expected a loss of 27 cents a share.
CORN FUELS GAINS
Monsanto, which makes genetically altered corn, soybeans, cotton and other crops that resist insects and tolerate weed-killing chemicals, said global growth in both corn and cotton sales helped drive revenue gains of 39 percent for the quarter and 13 percent year over year.
And in its ongoing battle for market share with key rival DuPont (DD.N), Monsanto said U.S. branded corn volume grew at its best rate in three years. The company gained 10 million acres to hit 13 million acres for it Genuity family of reduced refuge corn products.
Its Roundup Ready 2 Yield soybeans totaled 17 million U.S. acres in 2011, up 10 million acres over 2010, Monsanto said.
Continued expansion of its products should help the company achieve mid-teens earnings growth to hit a range of $3.34 to $3.44 a share for fiscal 2012. It said the first quarter of 2012 should yield earnings per share of 10-15 cents due to growth in Latin American markets. Wall Street analysts expected
8 cents a share.
"It's clear that we have turned a corner and returned to growth mode," said Monsanto Chairman and CEO Hugh Grant in a statement. "We made a conscious effort to reconnect with our customers, and from that earned significant sales growth for seeds and traits and created positive momentum we carry into 2012."
(Reporting by Carey Gillam in Kansas City, editing by Dave Zimmerman)