Commodities & Metals

Monsanto Raises Guidance In Weak Sector (MON)

Monsanto_logoMonsanto Company (NYSE: MON) today raised its 2008 guidance again. This is in response to the clear drop in the agriculture and fertilizer sector weakness.  Roundup, other glyphosate-related herbicides, and its seeds-and-traits performance are all cited as the reasons for its raised guidance.

Ongoing earnings guidance for 2008 is now about $3.64 per share. Itsreported earnings guidance is $3.59. InSeptember, it predicted ongoing earnings of $3.58to $3.60, with reported earnings of $3.49 to $3.51.

Monsanto also increased the targets for the 2009 fiscal year and its2012 long-term targets for the Roundup business. Previously, itexpected profit contribution from Roundup for 2009 to be $2.1 billion to $2.2 billion. Now it expects that Roundup willgenerate $2.3 billion to $2.4 billion in gross profit.The company also increased the 2012 gross-profit target to $1.9 billionfrom its original target of $1.8 billion.

Monsanto noted that the increased guidance for 2008 reflects previouslycommunicated better-than-anticipated results from its seeds-and-traitsbusiness. The company reiterated that its corn seeds and traitsplatform was expected to continue to drive growth in 2009, with atarget of 25% to 30% gross profit growth over its increased 2007performance.

Shares of Monsanto have increased from the announcement, but are stilldown sharply.  The intraday low was $77.10, and shares are still off13% at $85.00. It prior 52-week trading range was $82.51 to $145.80.

Jon C. Ogg
October 2, 2008