Syngenta Earnings Beat Forecasts, Confirms Targets
Swiss agrochemicals company Syngenta posted a better-than-expected 25 percent rise in first-half net profit and raised its guidance for 2008 and 2009, citing buoyant agricultural markets and good prospects for the southern hemisphere planting season.
Syngenta, which makes fungicides and herbicides as well as genetically modified seeds, said on Thursday it was now targeting full-year earnings per share (EPS) growth of over 35 percent and 15-20 percent for 2009.
Previously, the company had guided full-year 2008 EPS growth to exceed 20 percent.
Shares in the group were expected to open 3.2 percent higher, according to premarket data provided by Bank Clariden Leu.
Net profit during the first six months of the year rose to $1.519 billion, on sales up 28 percent at $7.295 billion.
A Reuters poll of 11 analysts had an average forecast for net profit of $1.434 billion and sales of $7.027 billion.
Rising crop prices and record food costs -- with some governments imposing emergency measures to make sure they have enough staples such as rice and flour -- are spurring farmers to expand planting, helping companies like Syngenta.
"We expect the continuing need to improve agricultural productivity to result in sustained demand for our products, allowing us to raise our target for 2009," said Chief Executive Officer Mike Mack.
Basel-based Syngenta trades at about 16.21 times expected 2009 earnings, according to Reuters data, trailing U.S. rival Monsanto's 27.16, but still a premium to DuPont's multiple of 12.43.