Going to Seed. The world’s largest seed producer announced strong earnings for the second quarter of fiscal year 2009. Monsanto (NYSE: MON), which we covered in our October 2008 issue, posted record net sales of $4 billion as increased revenues from the company’s US corn and soybean businesses bolstered the bottom line. A 20 percent jump in sales for its Seeds and Genomics division offset any weakness stemming from the draught in Brazil. And the increasing popularity of its higher-margin Triple-Stack corn seed and other advanced technologies among US agriculturalists bodes well for this year’s earnings.

As expected, sales volumes of Roundup to US farmers were down from a year ago, but not for material reasons; an anticipated increase in the sales price in the third quarter of last year prompted many customers to accelerate their purchases. Management emphasized that this business line will revert to historical earnings patterns this year, generating the bulk of its profits in the third and fourth quarters.

Net income totaled $1.1 billion for the quarter, down 3 percent on the year, but first-half net income eclipsed last year’s figure by 19 percent. For the year, the company expects earnings per share to range between $4.23 and $4.33–impressive results as the world economy slows–and its long-term earnings prospects are even more sanguine.

As arable land declines and emerging markets command an increasingly greater share of global food output, adoption of Monsanto’s crop-protection and yield-boosting products will increase exponentially–growing global food output will be a necessity, not an option. An industry-leading research and development pipeline should ensure that the company remains at the top of the heap. Between 1995 and 2007, Monsanto spent approximately $6.8 billion on R&D, and in the next 10 years close to $20 billion will be spent.

Surprise! Surprise!

Getting Schooled. For-profit education giant Apollo Group (NYSE: APOL), which operates the University of Phoenix and the University of Phoenix Online, posted second-quarter earnings of 77 cents per share, roundly beating the consensus estimate of 12 cents. The number of new students increased 23.1 percent compared to a year ago, but growth slowed compared to the previous quarter. Meanwhile, total enrollment grew 20.4 percent year over year. The company has continued to improve margins by lowering instructional costs.

Recent growth is as much a result of a languishing job market as the company’s continued expansion of its sales and promotional staff. And the acquisition of Aptimus, an online advertising firm, has brought a new level of sophistication to its marketing efforts, improving efficiency and conversion rates.

Despite these solid results, the stock has sold off considerably of late. Some investors were spooked by an uptick in bad debt expenses related to seasoned student loans, while high expectations–the company is the preeminent play in the industry–didn’t help matters.

Most analysts, however, remain sanguine about the company’s prospects. For-profit education companies such as Apollo Group traditionally thrive during downturns, as rising unemployment and economic uncertainty push many “nontraditional students” to augment their existing skill set or transition to a new career path. In such times, the higher earnings power purportedly conferred by a college degree holds a compelling allure, especially when that training is in a field such as business, nursing or information technology.

Who’s Buying What

Low Prices for High Rises. Commercial real estate has become the latest segment of the market to nosedive, with the John Hancock Tower becoming the latest poster child for the sector’s woes. Purchased in 2006 by Normandy Real Estate Partners and Five Mile Capital Partners for $1.3 billion, the building drew just $661 million at a fire-sale auction after its owners defaulted. The worst crisis in commercial real estate since the 1990’s appears to be brewing as commercial construction projects are being abandoned and vacancy rates are rising rapidly.

Against that backdrop, J.P. Morgan Securities analyst Anthony Paolone has upgraded CB Richard Ellis Group (NYSE: CBG) to “overweight” from “neutral.” A full-service real estate services company, the company offers services ranging from financing to property management. Since the real estate crisis first began, the company’s shares have plunged from a 2007 high of more than $41 to just over $4 today.

Coming a day after the real estate services firm announced that it had amended its credit agreement with its lenders, Paolone said the restructured debt agreement will alleviate the liquidity risk surrounding the stock. That has made the stock’s risk-reward profile extremely attractive, prompting the analyst to set a $7 twelve-month price target.

In addition to covenant relief, the company will be able to add up to $225 million to operating earnings calculated for covenant purposes through cost savings. There are also hopes that liquidity boosting programs for mortgage-backed securities backed by both residential and commercial loans will help revive activity in the sector.