Syngenta lifts profit target after strong Q3 sales
Syngenta raised its earnings guidance for the third time this year after quarterly sales at the world's largest agrochemicals firm beat estimates, benefiting from a continued recovery in farm markets.
The maker of seeds and crop-protection products now expects earnings per share to grow by around 60 percent this year from $3.56 in 2003, and said on Friday it was not unhappy with current market forecasts for earnings of $6.50 per share next year, or even $7.00 including the effect of accounting changes.
"The current EPS consensus for 2005 stands at $6.50 and we are comfortable with that," Chief Financial Officer Domenico Scala told Reuters.
Sales in the third quarter rose 17 percent -- or 14 percent in constant currencies -- to $1.374 billion, compared with an average $1.26 billion forecast of 11 analysts in a Reuters poll.
Investors welcomed the strong quarterly sales and increased guidance, and the shares were up 3.3 percent at 115.80 francs by 0903 GMT, outperforming its European sector peers and the broader Swiss market .
"Third-quarter sales have significantly beaten market expectations," said Vontobel analyst Martin Voegtli, who has a "sector perform" rating on the stock.
The maker of products that help farmers fight weeds, fungi and pests had already raised its 2004 guidance twice this year, as farming markets around the globe turn the corner after about five years of recession.
"We have seen a strong stabilisation of farm markets in 2004," Scala said. Syngenta expects full-year sales to be in line with its first-half performance when they rose 6 percent at constant currencies.
"These are excellent results," said Pictet analyst Patrick Lambert. "Unless we have a very bad year with weather (next year), if one just looks at fundamental demand and consumption, we should be okay," he added.
(From Reuters, October 22, 2004)
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