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(Reuters) - U.S. seeds and agrochemicals company Monsanto Co (MON.N), which is in the process of being bought by Germany's Bayer AG (BAYGn.DE), reported a stronger-than-expected quarterly profit on Wednesday as record soybean plantings lifted seed sales.
Shares climbed 1 percent and hit a two-year high of $118.47 a share.
St. Louis-based Monsanto reaffirmed its earnings per share target and raised its gross profit outlook for its seeds and genomics unit, which sells seeds, licenses biotech traits and sells farm data services.
Record soybean seedings in the United States and Brazil, the top two producers, were a boon for the world's largest seed company.
"There was a lot of acreage that rotated out of corn and into soy and Monsanto was set up really well for that since they had some product launches in soy this year," said Matt Arnold, an analyst with Edward Jones.
Sales of soybean seed and traits, the second-biggest business by revenue, jumped 29.3 percent to $896 million in the third quarter ended May 31.
Seedings of Monsanto's Xtend soybeans, the newest U.S. varieties, totaled 20 million acres this spring, above earlier forecasts for 18 million. Intacta, its South American variety, was planted on more than 50 million acres, near the high end of expectations.
However, sales of corn seed and traits, the company's biggest revenue generator, fell 6.3 percent to $1.49 billion.
Monsanto agreed in September to a $66 billion buyout offer from Bayer, that, if approved by regulators, would create a company commanding more than a quarter of the world market for seeds and pesticides.
Monsanto said on Wednesday it was working toward completion of the merger by the end of 2017 and expects to submit merger-related filings to the European Union by the end of this month.
Bayer has said it would sell its LibertyLink-branded seeds businesses to help satisfy competition authorities looking at the Monsanto deal.
Net income attributable to Monsanto rose to $843 million, or $1.90 per share, in the quarter, from $717 million, or $1.63 per share, a year earlier.
Excluding certain items, Monsanto earned $1.93 per share, beating the analysts' average estimate of $1.76, according to Thomson Reuters I/B/E/S.
Earnings per share guidance remained at the high end of the range of $4.50 to $4.90 on an ongoing basis. Seeds and genomics gross profit for fiscal 2017 was projected in the high single digits in percentage terms, up from a mid-single-digit forecast previously.
Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila, Nick Zieminski and David Gregorio