Commodities & Metals

Monsanto Rises on Improved Outlook (MON, MOS, SYT, POT)

Fertilizer and seed giant Monsanto Co. (NYSE: MON) today revised its third quarter and full year guidance above current consensus estimates and the shares are getting a nice boost on an otherwise bleak day on Wall Street.

Monsanto raised its EPS guidance for the third quarter to an adjusted total of $1.57-$1.62 and a GAAP-based $1.69-$1.74. The consensus estimate had called for adjusted EPS of $1.29.

For the 2012 fiscal year Monsanto raised adjusted EPS guidance to $3.65-$3.70 and GAAP-based EPS of $3.73-$3.78. The consensus estimate had been $3.56. The adjusted EPS includes a -$0.12 charge to resolve a tax matter, a -$0.01 charge for discontinued operations, and $0.05 gain on a claims settlement.

Since the beginning of the year, Monsanto stock is up nearly 10%, trailing only competitor Syngenta AG (NYSE: SYT) which is up by 11%. Mosaic Co. (NYSE: MOS) and Potash Corp. of Saskatchewan Inc. (NYSE: POT) are both down about -4% year-to-date.

Monsanto attributes the upward adjustment to earnings to larger acreage planting of corn and soybeans in the US, more plantings in Eastern Europe, and total corn plantings in Brazil. The company expects growth to continue through 2013:

The drivers that [Chairman, CEO, & President Hugh] Grant will highlight [in an investor presentation today] as creating the opportunity for mid-teens ongoing earnings growth in fiscal year 2013 include the continued expansion of Monsanto’s core businesses in the United States, the continued acceleration of the Latin American corn opportunity, and further growth from other international markets. Additionally, Grant cited the future growth opportunity from new products and platforms emerging from the company’s research and development efforts.

Monsanto’s shares are up about 3% at $76.90 in a 52-week range of $58.89-$83.94.

Paul Ausick