Monsanto’s weak quarter just a bump in the road by Dan Mitchell @FortuneMagazine January 7, 2015, 6:56 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Monsanto MON released first-quarter earnings Wednesday that were down, as expected, but not by nearly as much as some analysts were forecasting. More important than any immediate profit concerns, though, are the reasons for the somewhat brighter results. They are some of the same reasons that Monsanto, despite the “headline risks” the company faces from opposition to genetically modified crops, remains a solid long-term play. Most notably, Monsanto reported better-than-expected sales of Intacta, its latest variety of soybeans, which are designed to resist pests in South American fields. As one Motley Fool analyst put it, Monsanto’s patent on Intacta means that the company “will come to own the future of soybeans in Brazil.” Excluding extraordinary items, profits in the first quarter, which ended in November, were 47 cents per share. Analysts polled by Bloomberg on average had expected earnings of 35 cents. Revenue was down, as well, to $2.87 billion, but that also beat expectations by about $70 million. Intacta helped Monsanto boost its revenue from soybean seeds by 48%. The company maintained its forecast that earnings for the year will reach $5.75 to $6 per share. Not only were sales of Intacta appreciably better than expected in the quarter, but the company held to its forecast that in the current fiscal year, sales of the seeds will more than quadruple, to more than 12 million acres. Monsanto plans to eventually cover 100 million acres of South America with the bean variety. Sales of corn seeds, meanwhile, remained a problem as falling corn prices have driven farmers away from the crop. Corn seed sales fell by 12%. That played a part in the company’s decision to somewhat lower its 2015 outlook for its seeds unit, despite the growth in soybeans. It now expects that growth to be in the “single digits.” Soybean prices are down as well, but not by as much. Analysts might have lowered their expectations in recent months in part based on reports that Intacta wasn’t selling as well as expected. In particular, OTR Global LLC in September reported that 10 of the 14 “sources” it polled in Brazil and Argentina said demand was “poor” or “fair” due to high prices, and the researcher reduced its rating on Monsanto from “mixed” to “negative.” Monsanto stuck to its optimistic forecasts for the seed, and those forecasts seem to have been accurate. Meanwhile, while revenues were down in five of Monsanto’s six main business segments, they were all generally better than expected. In particular, revenues in the agricultural productivity segment fell by nearly 15% from the same period last year, but the company attributed much of that drop to the fact that it is shifting more of the segment’s business to “branded products,” which generally do much better in the third quarter. The segment gained wide attention with Monsanto’s acquisition of the Silicon Valley Climate Corp. for $930 million. The business unit is poised for potential huge growth as more farmers around the world demand access to data-management tools. Both that unit and Monsanto’s main seeds and traits business are well positioned to take advantage of demographic shifts and the changing climate, as farmers will face immense new challenges to deal with both. However much anti-GMO activists might protest the company, demand for its products can’t help but rise in the coming years.