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Last Update: 08-Jan-13 08:22 ET
Monsanto shares rise 4% following beat on earnings
Monsanto (MON $100.00 +4.10) reported first quarter earnings of $0.62 per share, $0.26 better than the Capital IQ consensus of $0.36, while revenues rose 20.5% year/year to $2.94 bln versus the $2.64 billion consensus. The company raised FY13 EPS guidance to $4.30-4.40, excluding non-recurring items, versus the $4.40 Capital IQ consensus, up from $4.18-4.32. The co also raised full year free cash flow guidance to $1.8-2 bln. The co expects net cash provided by operating activities to be $2.9-3.3 bln, and net cash required by investing activities to be $1.1-1.3 billion for FY13. The updated EPS and free cash flow guidance does not include an estimated historical range of $0.20-0.25 of EPS contribution related to the Roundup Ready soybean business in Brazil given uncertainty in timing of resolution of ongoing business and legal developments. Sales for Monsanto's Seeds and Genomics segment increased 14% in Q1 to $1.8 billion, with corn seed and traits performance driving Q1 strength. Corn seed and traits net sales increased 27 percent over last year's Q1 to $1.1 bln, driven in part by the business strength in Brazil, Argentina and Mexico. The trait upgrade and expansion is on track in both Brazil and Argentina where the co is achieving strong demand for its corn products. In Brazil, farmers continue to upgrade from single trait corn products to the first double stack, VT PRO 2. In its second year of commercial sales, VT PRO 2 is the second-highest volume trait in the co's Brazil corn portfolio this year. Likewise, in Argentina, the company has also seen strong adoption of its Genuity VT Triple PRO product.
The triple-stack corn product is on track to be 40% of the co's Argentine corn portfolio in just its second year on the market. Complementing the corn performance in Latin America is the early momentum in the U.S. seeds and traits business. Backed by strong cash flow and customer prepayments, the co noted a positive U.S. order book, with the order pace ahead of the same point in time last year. With two years of strong performance, company executives said the U.S. business is in position to grow again in 2013. This includes another increase in acres for both its Genuity? Roundup Ready 2 Yield platform in soybeans and the Genuity reduced refuge family in corn. Note: In 2011, Seeds and Genomics derived 87% of the company's total gross profit.
The triple-stack corn product is on track to be 40% of the co's Argentine corn portfolio in just its second year on the market. Complementing the corn performance in Latin America is the early momentum in the U.S. seeds and traits business. Backed by strong cash flow and customer prepayments, the co noted a positive U.S. order book, with the order pace ahead of the same point in time last year. With two years of strong performance, company executives said the U.S. business is in position to grow again in 2013. This includes another increase in acres for both its Genuity? Roundup Ready 2 Yield platform in soybeans and the Genuity reduced refuge family in corn. Note: In 2011, Seeds and Genomics derived 87% of the company's total gross profit.
