The St. Louis company also said Wednesday that it tried to plant a seed for future growth by eating some drought-related expenses in the recently completed quarter.
Monsanto said the 2012 drought that parched stretches of the United States forced it to use South American greenhouses more to produce corn seeds. That contributed to a 7 per cent increase in cost of goods sold in this year's quarter. Monsanto decided to eat the higher expenses tied to seed production instead of passing them along through price hikes.
CEO Hugh Grant told analysts during a Wednesday morning call the company saw that as "an investment in our customer base," one they hope helps customer sentiment and profitability next year.
The move was more than just a public relations stunt, according to Morningstar analyst Jeff Stafford. He said Monsanto has turned off some farmers in the past by introducing new seeds at very high prices.
"They are acutely aware of driving prices year over year and what that means in their relationship with farmers," he said.
Overall, Monsanto earned $909 million, or $1.68 per share, in the quarter ended May 31, down from $937 million, or $1.74 per share, a year ago.
Earnings totalled $1.66 per share, not counting a tax matter resolution.
Revenue inched up less than 1 per cent to $4.25 billion. In contrast, Monsanto's revenue had soared 17 per cent in last year's quarter when the mild spring that preceded the drought allowed farmers to sow crops earlier.
Analysts expected earnings of $1.61 per share on $4.41 billion in revenue for this year's quarter, according to FactSet.
Several analysts cited a lower tax rate as the main factor behind the better-than-expected earnings.
Monsanto Co. makes seeds for crops like corn, soybean, cotton and wheat and crop protection chemicals like the herbicide Roundup. The agricultural giant produces genetically engineered seeds used by farmers for their pest resistance and ability to produce bigger crops.
Many U.S. farmers credited genetic modifications in corn with saving last year's crop from all but total devastation as half of the nation endured the worst drought in 60 years. But these crops also have drawn criticism from organic food advocates who say they are harmful to people and the environment. Last month, protesters organized "March Against Monsanto" rallies in several countries over genetically modified food.
Monsanto has maintained that its seeds improve agriculture by helping farmers produce more from their land while conserving resources such as water and energy.
Corn, which is used for food, fuel, animal feed and soda syrup, is by far Monsanto's largest unit, and revenue from that segment climbed 3 per cent to $1.56 billion in the quarter.
But revenue from its soybean and cotton segments both fell. The company saw fewer acres of cotton planted.
Stafford said Brazilian farmers helped pressure the soybean segment because they stopped paying royalties on a brand of seeds.
Revenue from the company's agricultural productivity segment, which includes herbicides, climbed 9 per cent to $1.19 billion.
Monsanto, which has touted its corn seed and international growth prospects, said late last month that it expects earnings growth of more than 20 per cent in fiscal 2013 from its on-going businesses. It forecast annual adjusted earnings, which exclude some one-time items, of $4.50 to $4.55 per share and reaffirmed that prediction on Wednesday.
Analysts expect, on average, earnings of $4.58 per share.
Shares of Monsanto fell 56 cents to close at $100.84 Wednesday. Its shares had peaked for the past year at $109.33 in mid-May. Monsanto shares are up 7 per cent so far in 2013.Suggest a correction