Monsanto Net Loss Widens on Acquisition


Agricultural company Monsantoposted a wider-than-expected net loss on Wednesday and forecast fiscal 2008 earnings below Wall Street, hurt by a one-time charge related to acquiring cotton company Delta and Pine Land.

Monsanto reported a loss of $210 million, or 39 cents per share, in its fiscal fourth quarter ended Aug. 31, compared to a net loss of $144 million, or 27 cents per share, a year earlier. Earnings per share for the year were $1.79.

The results included a $186 million in-process research and  development charge at Delta and Pine Land. Monsanto sells genetically modified seeds.

On an ongoing basis, the St. Louis-based company said its loss was 18 cents per share. Analysts on average were expecting a loss of 17 cents, excluding items, according to Reuters Estimates.

Net sales rose to $1.57 billion from $1.39 billion, helped by a strong end to the corn season in the United States and higher corn seed revenue from Argentina and Brazil.

Monsanto said it expected fiscal 2008 earnings of $2.20 to $2.40 per share, reflecting a growth rate of 10% to 20% over 2007. Analysts on average had forecast $2.50, according to Reuters Estimates.

Monsanto reported net income of $993 million for 2007 which was significantly higher than net income of $689 million in fiscal year 2006.

The company experienced strong growth this year in sales of its genetically modified corn, engineered to help farmers fight weeds and insects, as demand for biofuels and exports drove expansion of corn acres. But the fourth quarter is typically slow as farmers focus on harvesting of row crops.

"We realized record sales for a fourth consecutive year, made several strategic acquisitions and rewarded shareowners with our largest dividend increase in our history. Our results this year have created a strong foundation for continued earnings growth for our business leading into 2008 and well into the next decade," Monsanto CEO Hugh Grant said in a statement.

Grant said Monsanto realized record sales for a fourth consecutive year. It also made several strategic acquisitions and approved its largest dividend increase ever.

As the company looks ahead to 2008, he said Monsanto is focused on market share rather than the absolute number of acres planted with its seeds.

Grant said as the world gets warmer, genes engineered to withstand drought will become more important.

Analyst Kevin McCarthy with Bank of America Equity Research said Monsanto's overall sales growth of 13 percent met his forecast but with a more favorable mix.

He said strong early sales of corn seeds in Brazil and Argentina and better than expected Roundup pricing accounted for "superior sales."

He maintained his "neutral" rating on the company's stock, citing an improving market in Brazil against threats of increasing competition from DuPont Co. and Syngenta SA

- Wire services contributed to this report.