The world has to eat, and Monsanto (NYSE:MON) makes seeds and other products to enhance agricultural productivity to help feed a hungry population across the globe. Despite controversy about its genomics work, Monsanto has enjoyed substantial growth over the years, and its stock current stands near all-time record highs.

Coming into Wednesday's fiscal second-quarter report, Monsanto investors were prepared for slight declines in revenue and a more extensive pullback in adjusted earnings. The company wasn't able to avoid the bottom-line decline, but sales were stronger than expected, and Monsanto believes that the rest of its fiscal year should go well even as it still hopes to close its pending merger with Bayer by the end of calendar 2017. Let's take a closer look at Monsanto and what its results say about its future.

Farmers in cornfield.

Image source: Monsanto.

Strong soybeans beat out sagging corn

Monsanto's fiscal third-quarter results were generally solid. Revenue rose 1% to $4.23 billion, which was quite a bit better than the slight drop that most investors were expecting to see. GAAP net income jumped 18% to $843 million. Although adjusted earnings per share of $1.93 were down more than 10% from year-ago levels, they were nevertheless far better than the consensus forecast among those following the stock for $1.76 per share.

Taking a closer look at Monsanto's numbers, the company's breakdown by segment was different than it has appeared in recent quarters. The usually strong seeds and genomics business saw a roughly 2% drop in sales, with weakness in the corn segment being one of the biggest detractors from performance. Soybean sales soared almost 30%, helping to offset the poor performance in corn and in Monsanto's all other crops catchall segment. Cotton seed sales were also up healthily, while vegetable seeds were relatively flat. Similar trends showed up on a gross profit basis, where soybeans climbed by more than half while corn and the all other crops divisions took big hits. Monsanto pointed to new soybean technologies in driving growth, but the disappearance of benefits from the company's alfalfa license weighed on its catchall category sales and gross profit.

The agricultural productivity segment has often lagged behind, but this quarter, it was strong once again. Revenue and gross profit were both up 12%, and Monsanto said that improved pricing and sales volumes for the company's herbicide products were primarily responsible for the upward movement from the segment.

CEO Hugh Grant celebrated the results. "Our innovation leadership and commitment to our grower customers is driving our growth," Grant said, "and the completion of the third quarter bolsters our confidence in the full year." The CEO noted that Monsanto employees have done a good job of both sustaining the company's fundamental business and preparing for the Bayer merger.

Can Monsanto keep growing?

Typically, companies that are in the middle of a merger don't focus as much on their future growth prospects. Yet Monsanto shareholders have been uncertain about the probabilities of the deal actually going through, and even now, the company's stock trades almost 10% below the stated merger price of $128 per share.

That hasn't changed Monsanto's views on how strongly it will finish the current fiscal year. The company said that it now expects GAAP earnings to come in near the high end of a range between $4.09 and $4.55 per share, which is up slightly from its previous guidance. Monsanto repeated its adjusted earnings guidance for $4.50 to $4.90 per share, again saying that it's aiming for the upper part of the range. An upgrade for seed gross profit figures to a rise of upper single-digit percentages was an improvement from earlier in the year, and non-core asset sales should help Monsanto's fiscal fourth-quarter numbers by about $70 million.

Monsanto investors were satisfied with the report, and the stock rose by about two-thirds of a percent in pre-market trading immediately following the announcement. The impending merger has put a lid on the stock's volatility, but shareholders seem to be fairly comfortable either that the deal will go through or that Monsanto will be able to thrive even if the merger doesn't happen.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.