Continued adoption of Monsanto Co.'s latest soybean, cotton and corn products drove revenue for the seed giant, even amid what it called a challenging agricultural environment.
Monsanto said Wednesday its sale to German chemical conglomerate Bayer AG was progressing. Bayer's $57 billion deal to create the world's largest supplier of pesticides, seeds and crop genes is expected to close early next year, as regulators continue to review the transaction.
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In light of the deal, Monsanto said it wouldn't provide financial guidance for 2018. Shares climbed roughly 1% to $120.65 in premarket trading.
Monsanto has been introducing soybean varieties that are genetically engineered to resist a more powerful combination of herbicides. More than 20 million U.S. acres were sown with the new seeds, the company said Wednesday, and it expects to have the supply for 40 million acres across next year's planting season.
Monsanto's new soybean variety, engineered to resist the herbicide dicamba as well as glyphosate, has also been linked to crop damage across some portions of the southern U.S. A growing number of farmers in Arkansas, Missouri, Mississippi and Tennessee have reported crop damage allegedly caused by dicamba drifting from neighboring fields. Some farmers have sued Monsanto.
The company has said it advises farmers on how to use the spray safely and will fight the lawsuits.
For the quarter Monsanto reported income of $20 million, or 5 cents a share, up from a loss of $191 million, or 44 cents a share, a year ago. Revenue grew 4.8% to $2.69 billion. On an adjusted basis, earnings were 20 cents a share.
The positive adjusted profit was far higher than the loss of 41 cents that analysts had projected. Monsanto said the better-than-expected results were due to tax benefits and a pretax benefit of $200 million due to corn licenses in Brazil.
Still, Monsanto predicts lower planted corn acres in Brazil as well as challenging corn prices globally.
For cotton, the company saw its latest seed varieties reach more than 6 million acres amid increases in both the U.S. and Australia.
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(END) Dow Jones Newswires
October 04, 2017 09:24 ET (13:24 GMT)