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Shares of seed company Monsanto Co. (NYSE: MON) have been tumbling this morning, despite the firm posting better-than-expected second quarter earnings per share. Hurting the stock this morning is the company's full-year guidance, which was unchanged from a week ago.
Monsanto reported this morning that its profit during the second-quarter more than doubled to $1.13 billion, or $2.02 per share, boosted by strong corn seed and herbicide sales. These numbers are up from $543 million, or 98 cents per share reported in the same period a year ago. Analysts' forecast was for earnings of $1.72 per share in the quarter, according to Thomson Financial.
The company's quarterly revenue surged by a respectable 45% to $3.8 billion, compared with $2.6 billion a year ago. For this period, the producer of genetically modified seeds counted strong corn seed sales, which climbed to $1.7 billion. The company benefited from strong demand from the U.S., North America and Europe-Africa regions that helped to increase revenue. The increasing use of the grain to make ethanol, a gasoline substitute, also came as a catalyst for the company's quarterly sales.
Despite posting surprising earnings numbers, Monsanto's shares have been plunging in morning's trading on traders' disappointment that the company did not lift its full-year earnings outlook. Monsanto confirmed the fiscal 2008 outlook it lifted a week ago to $3.15 to $3.25 a share in earnings. Analysts, on average, were waiting for a higher profit of $3.20 per share.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
4-02-2008 @ 2:39PM
tom said...
I wonder if it is true that 150,000 India farmers committed suicide when their Monsanto crops failed? And when they were not allowed to reuse the sseed that survived without paying Monsanto more money which they didn't have? I wonder if it is true that Monsanto has a staff of 75 and a budget of 75 millions to go after farmers that want to use seed over? And is it true that if pollen drifts over to a unaltered field, the new seed belong to Monsanto? And if the winds carry the pollen to other fields then eventually all seed will be owned by Monsanto? And that in the end Monsanto will own all the food crops in the world? No wonder they hate us...