US seeds and agriculture giant Monsanto has posted a surprise adjusted profit, boosted by falling expenses and higher corn seed volumes.
Monsanto – after agreeing last month to be bought by German agro-chemical firm Bayer AG for $66bn (£52bn) – also took the opportunity to express its confidence the deal would go ahead.
The two companies still have to satisfy regulators on both sides of the Atlantic and investors have expressed doubt over the companies' ability to meet requirements.
The combined company will command more than a quarter of the world market for seeds and pesticides if it goes ahead as planned. Monsanto – which accepted a second swing offer of $128-per-share in September –said today it's working towards completing the merger before the end of 2017.
Shares in Monsanto climbed in the pre-market after its latest numbers were announced, with the results beating Wall Street expectations. Monsanto shares are up more three per cent in the year to date, though still way under the agreed Bayer offer.
The company reported a net loss of $191m during the quarter, or 44 cent loss per share, compared with a $495mn loss for the same period a year ago.
Monsanto reported adjusted earnings per share of seven cents, against expectations of a 5 cents loss.
Sales in the quarter hit $2.56 billion, up from $2.36bn last year, and smashing expectations of $2.36bn.
Hugh Grant, chairman and chief executive, said:
To see it through, our fiscal year 2017 priorities are focused on delivering on the operational plan and key business milestones for the year, while also executing on the necessary steps to close the deal with Bayer.
Ultimately, we believe that combining with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”
Monsanto's expenses dropped by almost 10 per cent, as cost cutting measures kicked in. It announced back at the beginning of the year it would cutting some 3,600 job – 16 per cent of its global workforce – by the end of fiscal 2018.
Higher corn seed volumes in the US pushed up net sales in Monsanto's corn seeds and traits business by 34 per cent in the three months ended 31 August.
14 September: Monsanto accepts $128 per share offer