MONSANTO 
By Carey Gillam
Monsanto, the world's largest seed company, and a developer of genetically altered corn, soybeans and cotton, said net income rose to $556 million, or $1 a share, in the first quarter that ended November 30, from $256 million, or 46 cents a share, a year earlier.
The results included earnings of 2 cents a share from continuing operations and a tax-related gain of 8 cents.
Analysts on average were expecting profit of 59 cents a share before special items, according to Reuters Estimates. It was not immediately clear which items were excluded.
Net sales rose 29 percent to $2.6 billion.
Morningstar analyst Ben Johnson said the results were surprisingly strong, particularly in light of signs that farmers may be cutting back on inputs such as Monsanto's herbicide products due to economic concerns.
"Monsanto seems to have bucked what has been a negative trend," Johnson said.
STRENGTH IN HERBICIDES
For the first quarter, St. Louis-based Monsanto said strong demand in Brazil for Roundup and other glyphosate-based herbicides led sales increases.
First-quarter results were also boosted by a 31 percent jump in soybean sales from a year earlier, and vegetable seeds' net sales that grew by 21 percent, thanks largely to acquisition in June of Netherlands-based De Ruiter Seeds, Monsanto said.
Monsanto stock was up more than 16 percent at $85.05 in afternoon New York Stock Exchange trading.
Investor enthusiasm was partly tied to the company's announcement on Wednesday that it had submitted a request for U.S. regulatory approval for a drought-tolerant corn that it hopes to roll out in conjunction with BASF Plant Science by 2012. Markets around the world are clamoring for this technology as rival technology companies race to commercialize such crops.
"That could be could be a strong growth driver. It is something investors are pointing to in terms of keeping that sustainable growth," said Brian Hicks, co-manager of Global Resources Fund
In all, Monsanto laid out a pipeline of products expected to substantially boost revenues and global market share by 2020.
PICKUP IN SEED ORDERS
The company also said Wednesday that although seed orders by U.S. farmers lagged in the first quarter, they were picking up significantly ahead of the 2009 U.S. planting season.
Both corn and soybean seed sales accelerated in December, after the close of the first quarter, and were stronger than normal in the first week of January.
As of December 31, overall prepayments for seeds to be planted on U.S. acres in 2009 were running 50 percent ahead of last year, said Monsanto Chief Financial Officer Terry Crews.
Officials said the orders came amid stiff competitive pressure that included deeply discounted rival seed products.
Analysts had been concerned about both glyphosate pricing and corn seed profitability, but said Wednesday that Monsanto's results and outlook should allay these concerns.
Option traders seized call options expiring in January and February as the company indicated that it would raise prices for its corn seeds and Roundup herbicide, stating that farmers would probably swallow the increases in exchange for enhanced yields, Andrew Wilkinson, senior market analyst at Interactive Brokers Group, said in a note to clients.
About 94,000 option contracts changed hands in Monsanto in afternoon trading, dominated by 63,000 call options that give investors the right to buy the company's shares at a fixed price within a specified time period. Volume was six times the normal level, according to option analytics firm Trade Alert.
Based on early results for the new year, Monsanto increased its full-year earnings-per-share forecast to a range of $4.40 to $4.50, excluding items, from its previous outlook of $4.20 to $4.40.
Free cash flow fell to $124 million in the quarter from $740 million a year earlier. Monsanto said that was mainly due to delayed corn seed and trait orders from U.S. customers after a late U.S. corn harvest.
(Additional reporting by Doris Frankel; Editing by Lisa Von Ahn)
