Monsanto second quarter net profit down at $887 million

Biotechnology giant Monsanto Company today reported a net second quarter income of $887 million against $1.09 billion in the same quarter of the previous year. Net sales also were lower at $3.89 billion against $4.04 billion in the same quarter of the previous year.

Net sales decreased $145 million, or 4 per cent, in the three-month comparison primarily as a result of lower prices for the company's glyphosate-based herbicides.

These price decreases were central to the company's strategy of increasing global volume, which increased in several regions including Brazil, Argentina, Asia, and the United States. Net income in the second quarter was $887 million, the company said in a release.

Gross profit declined 17 per cent in the quarter to $2.1 billion, also driven by the price decreases for Roundup and other glyphosate-based herbicides. For the first six months, gross profit is down 30 per cent or $1.2 billion.

Operating expenses decreased 13 per cent, or $128 million, in the second quarter 2010 compared to the prior year. In the three-month comparison, selling, general and administrative (SG&A) expenses decreased 2 per cent. R&D expenses increased 5 per cent as the company continues to manage more projects in advanced pipeline phases.

As a per cent of net sales, SG&A expenses were 13 per cent and R&D expenses were 7 per cent.