Monsanto Co., St. Louis, has reported a narrower first-quarter loss, saying increased sales were offset by a $284 million pretax legal reserve for costs tied to the bankruptcy case of spinoff Solutia Inc.

The company said it posted a net loss during the three-month period ending Nov. 30 of $40 million, or 15 cents a share, compared with a loss of $97 million a year ago.

The latest figures also reflect a tax benefit of $86 million in discontinued operations and $20 million in continuing operations resulting from the loss incurred on the European wheat and barley business.

Monsanto said first-quarter sales were $1.10 billion, up 7 percent from $1.03 billion a year ago on improved corn seed sales in Europe and Brazil, higher corn and soybean trait revenues in the United States, and greater profits for the company's cotton traits in Australia.

"The first quarter was a good start to the fiscal year, yet the most significant part of our annual business cycle is still to come," said Hugh Grant, Monsanto's chairman, president and chief executive.

Monsanto announced its formation of the Solutia-related legal reserve - $181 million after taxes - last month in what signaled the first peek at the company's potential environmental and legal liabilities related to entity Monsanto spun off in 1997. Monsanto has cautioned that the fund may differ from its estimate.

Source: Yahoo News