Monsanto Co on Tuesday increased its 2005 profit forecast because of better-than-expected revenue from seed sales and gene technology as the US spring planting season gets underway. Monsanto, whose shares rose 5 percent, forecast profit in a range of 85 cents to 97 cents a share, compared with a prior forecast of 71 cents to 93 cents a share. The company cited good sales of corn and soybean seeds and licensing fees and royalties for technology to produce genetically modified crops.
The company also said net profit for the second quarter ended in February should come to $1.37 a share, or $1.38 a share on an ongoing basis, excluding certain items. Analysts, on average, expected the company to earn $1.18 a share, according to Reuters Estimates.
Monsanto, which will report earnings April 6, said results were boosted by higher revenue from its corn and soybean genetic technology business in the United States, and increased corn seed sales in Europe and Africa.
Monsanto has a growing presence in the US seed industry, both through direct sales of its seeds and licensing of genetic traits to other seed companies.
"This second quarter ends up being the big one for seed sales," said Monsanto spokesman Bryan Hurley.
Higher revenue from Monsanto's Roundup and non-branded herbicides abroad also contributed to the raised expectations, continuing a trend noted in the first quarter, said Hurley.
Monsanto, whose revenue was once largely dependent on its agricultural herbicide sales, has been shifting its focus to sales of seeds and development of genetic modifications to seeds because of increased competition in herbicide market.
The St. Louis-based company's gene technology business includes licensing and selling genetic characteristics for crops that make plants resistant to herbicide and insect, and this year Monsanto has a soybean trait on the market that produces healthier oil.
Monsanto shares rose $3.07 to $63.17 on the New York Stock Exchange.
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