Amid widespread protests against the ‘Monsanto Protection Act’, the biotech giant has reported a 22 percent increase in net profits – an announcement that may spark further outrage about the provision that protects the company from financial damage.
Monsanto on Wednesday reported that its net income rose 22 percent to $1.48 billion, or $2.74 a share, in a one-year period. The profit increase, which occurred in the three-month period through February, marked a new record for the lucrative biotech company. Revenue rose 15 percent to $5.47 billion, much of which came from the sales of genetically modified corn seeds, particularly those sold in emerging markets like Brazil, Argentina, and other Latin American countries.
Monsanto’s seed business, particularly its genetically engineered corn, cotton and soybeans, increased by more than 10 percent in the second quarter. The seeds repel bugs and are resistant to weed-killers, making them popular among farmers trying to yield more produce.
The profit spike exceeded expectations and Wall Street predictions and may have widened the gap between Monsanto and other seed businesses. The company’s shares also rose 89 cents, closing at $104.51 on Wednesday. Over the past years, the shares have risen by about 10 percent.
“So our bottom line business outlook today means the momentum that we anticipated in our first quarter has clearly carried through into even stronger business results for the second quarter,” said CEO Hugh Grant, on a call with analysts, as reported by the Associated Press.
And the company only predicts to be making more money this year: Monsanto expects $2 billion in free cash flow in 2013 and will become “more aggressive” in returning cash to shareholders through dividends and “opportunistic” share purchases,” Chief Financial Officer Pierre Courduroux said during the call with analysts.
But it’s not just the corporation’s seeds that are spiking revenue: the company also sells crop chemicals, which saw a 37 percent increase in sales. The herbicide Roundup, a popular weed killer, jumped by 73 percent to $371 million.
News of the company’s financial success comes just days after US President Barack Obama signed a bill into law that protects the billion-dollar corporation from any sort of litigation. Known by critics as the ‘Monsanto Protection Act’, section 734 of the Agricultural Appropriations Bill gives biotech companies immunity in regards to the production and sale of genetically modified seeds. The company would therefore have free reign to sell genetically engineered products the long-term effects of which remain unknown, without the prospect of facing a lawsuit for it.
Nationwide, Americans from the far right and the far left have united in their condemnation of the provision that benefits Monsanto, and a petition against the provision generated more than 250,000 signatures. Critics claim the legislation allows the company to bypass the court system and continue to dominate the US seed industry.