Monsanto Posts Solid Win in Q2

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When Monsanto Co. (NYSE: MON) reported its most recent earnings results, the company posted a big win on both the top and bottom lines. In this report, executives reinforced confidence about the cumulative strength of the business and updated full-year guidance to the high end of the range. Monsanto also highlighted its progress in its merger with Bayer as both parties continue to work toward completion of the transaction by the end of calendar year 2017.

The company reported its fiscal second-quarter financial results before the markets opened on Wednesday. Monsanto said that it had $3.19 in earnings per share (EPS) and $5.07 billion in revenue, versus consensus estimates from Thomson Reuters that called for $2.79 in EPS and revenue of $4.73 billion. The same period of last year reportedly had EPS of $2.42 and $4.53 billion in revenue.

The company’s performance was driven in part by strong gross profit growth from its corn and soybean businesses, the absence of the Argentine peso devaluation and benefit from the sale of its Latitude wheat fungicide business.

In terms of the outlook for the 2017 fiscal year, the company expects to see EPS at the high end of its guidance range of $4.50 to $4.90. The consensus estimates are $4.76 in EPS and $14.11 billion in revenue for the full year.

Hugh Grant, board chair and chief executive of Monsanto, commented:

We are delighted to have delivered such an excellent first half and strong second quarter, in the face of what is still a tough macro economy for agriculture. While we’re increasing confidence in the outlook for the rest of the year, our emphasis at Monsanto is where it has always been – on bringing innovation to growers. Our proven innovation and unique platform advantages position us well to meet the challenges ahead, as well as make us an attractive, complementary partner for Bayer.

On the books, Monsanto’s cash, cash equivalents and short-term investments totaled $2.29 billion at the end of the quarter, up from $1.74 billion at the end of the previous fiscal year.

Shares of Monsanto closed Tuesday up 0.7% at $114.21, with a consensus analyst price target of $122.67 and a 52-week trading range of $84.79 to $116.04. Following the release of the earnings report, the stock was up 1.5% at $116.50 in early trading indications Wednesday.