KANSAS CITY, Mo., Feb 12 (Reuters) - Monsanto Co (MON.N: Quote, Profile, Research), a U.S. agricultural biotech company, raised its 2008 earnings forecast on Tuesday, citing strong demand for specialty corn and soybean seeds and glyphosate-based herbicides in news that sent its shares up more than 5 percent.
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t. Louis-based Monsanto raised its earnings forecast for fiscal 2008 ending Aug. 31 to a range of $2.70 per share to $2.80 per share, from $2.50 to $2.60. Analysts, on average, had looked for earnings of $2.79 a share, according to Reuters Estimates.
"It is probably a little bit better than most people were expecting," said Tom Leritz, a portfolio manager at Argent Capital Management. "They have a very good competitive position in an industry that is accelerating in growth. If you look at the demand for food globally, they help supply that demand."
The company said its glyphosate-based herbicide business should deliver between $1.3 billion and $1.4 billion of gross profit in fiscal 2008, backed by both increased volumes and prices.
As well, Monsanto said it is seeing strong early orders for corn seed in the United States, along with good growth in Argentina, where its DEKALB corn seed brand realized a 5 share-point gain for a second consecutive season.
Overall, the company's seed and traits business should generate about $3.5 billion in gross profit in fiscal 2008, Monsanto officials said.
Free cash flow in fiscal year 2008 is now expected to be at the upper end of the company's previously announced range of $900 million to $1 billion, Monsanto said in a statement.
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