Monsanto raises guidance in hopes of allaying investor fears; Cites strong herbicide sales
ST. LOUIS (AP) -- Monsanto Co. raised its year-end earnings forecast Thursday, hoping to calm nervous investors after the agricultural products company's stock price fell this week.
Monsanto now expects net income of $3.64 per share for fiscal 2008, up from a previous range of $3.58 to $3.60. On average, analysts polled by Thomson Reuters had expected earnings per share of $3.57.
Monsanto is set to announce its earnings results next Wednesday, but the company put out its new guidance Thursday after the company's traded sharply lower. The shares closed down $15.83 or 16 percent at $82.01 amid a broader decline in the market.
"We know there is turmoil out there, but we want to make sure people know we're confident in our business," Vice President of International Operations Kerry Preete said in phone interview.
Monsanto wanted particularly to allay fears that high phosphorous prices might hurt its business. Prices for that key fertilizer have skyrocketed over the last year, and the material is an ingredient in the company's Roundup fertilizer.
Preete said phosphorous only accounts for 10 percent of the company's cost to make Roundup. Monsanto expects solid Roundup sales as global demand for the herbicide increases.
Monsanto said it expects full-year gross profit from Roundup in 2009 between $2.3 billion and $2.4 billion. It had previously estimated profit in the range of $2.1 billion to $2.2 billion. The company increased its 2012 Roundup gross-profit target to $1.9 billion from $1.8 billion.
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