By Joshua Jamerson
Monsanto Co., in the middle of being bought by Bayer AG, said it returned to profitability in its latest quarter, helped by strength in South America.
In the first quarter, which ended in November, revenue from seeds and genomics, Monsanto's biggest business, surged 32% to $1.85 billion. The company said it remained on track with its expansion of Intacta RR2 Pro soybeans in South America, expecting to reach a target of 45 to 55 million acres in its current year.
The company has sought to increase penetration of soybean technologies and improve soybean costs to drive growth in the seeds and genomics segment. Growth in the segment during the quarter was also helped by a more than 25% increase in planted corn acres in Argentina and more than a 10% increase in corn acres planted in Brazil. Sales in Monsanto's agricultural productivity segment, meanwhile, slid 2.2% to $802 million.
Shares rose 0.4% to $105.50 in premarket trading Thursday.
Bayer started courting Monsanto in May and in September Monsanto agreed to sell itself in a $57 billion deal, which would pivot Bayer heavily toward agriculture in a long-range bet on high-tech crops to sustain a growing global population.
Executives from the companies believe combining Monsanto's prowess in engineering seeds with Bayer's much broader pesticide portfolio will bolster their research and development operations, benefiting farmersand adding jobs with increased resources over time.
The deal, which would rank as the largest-ever takeover of a U.S. company by a German firm, is moving toward regulatory reviews in the U.S. The election of Donald Trump as president has raised questions around large-scale merger deals and foreign investment in U.S. companies. Monsanto said Thursday it still expects the transaction to close by the end of 2017.
Monsanto reported net income of $29 million, or 7 cents cents a share, compared with a year-prior's net loss of $253 million, or 56 cents a share.
Excluding certain items, adjusted per-share earnings swung to a profit of 21 cents from a loss of 11 cents a year earlier. Total sales climbed 19% to $2.65 billion.
Analysts polled by Thomson Reuters were expecting net income of a penny a share on revenue of $2.27 billion.
Write to Joshua Jamerson at email@example.com
(END) Dow Jones Newswires
January 05, 2017 09:01 ET (14:01 GMT)
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