By Carey Gillam
KANSAS CITY (Reuters) - Monsanto Co
St. Louis-based Monsanto said net income fell 19 percent and reported earnings per share for the second quarter ended February 28 of $1.60 on an as-reported basis, down from $1.97 a year earlier. The company said it earned $1.70 on an ongoing basis versus $2.16 a year earlier.
Analysts were expecting $1.73 a share, according to Thomson Reuters I/B/E/S and $1.70 on a fully reported basis.
Still, some analysts said the company had been sending signals lately that results would be off, and they were surprised the bottom line wasn't worse.
I'm pleasantly shocked," said Edward Jones analyst Dan Ortwerth. "I expected a disaster. Roundup (herbicide) is a train wreck, but we knew that. But the seed business is holding up well."
Monsanto also warned the market that full-year ongoing results would likely come in at the low end of its previously stated range of $3.10 to $3.30, and said it was unlikely to meet its long-promised goal of doubling 2007 gross profit by 2012.
"While there may be options to make an accelerated push for 2012, it's clear to me that achieving that objective would involve making short-term choices that are not in the long-range interests of the business," Monsanto chairman Hugh Grant said in a statement.
Net income in the second quarter was $887 million, down from $1.092 billion in the second quarter of 2009.
Net sales fell $145 million, or 4 percent, compared to a year earlier, due largely to lower prices for the company's glyphosate-based herbicides as the company faces stiff competition in key global markets.
Sales of seeds and the company's genetic traits, which are engineered into seeds to make crops resistant to pests and herbicide treatments, grew in the quarter.
Still, gross profit declined 17 percent in the quarter to $2.1 billion because of the price decreases for Roundup and other glyphosate-based herbicides. For the first six months, gross profit was down 30 percent or $1.2 billion.
Monsanto said it took a restructuring expense of $84 million in the quarter, including a $54 million charge for U.S. corn cost-of-goods sold as the result of a decision to exit some product lines in its U.S. branded corn business.
Shares rose initially in premarket trading but quickly turned lower.
(Reporting by Carey Gillam, editing by Dave Zimmerman)
