Monsanto Falls Short on Earnings but Lifts Guidance

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Monsanto Co. (NYSE: MON) reported its fiscal second-quarter financial results before the markets opened Wednesday. The company said it had $2.42 in earnings per share (EPS) on $4.53 billion in revenue, which compares to consensus estimates from Thomson Reuters of $2.44 in EPS on revenue of $4.76 billion. In the same period of last year, it posted EPS of $2.89 and $5.20 billion in revenue.

The company updated its fiscal year 2016 as-reported EPS guidance to be in the range of $3.72 to $4.48 per share, primarily due to a change in the expected timing for the accounting of restructuring expenses. The company confirmed ongoing EPS guidance in the range of $4.40 to $5.10 per share. Monsanto’s guidance incorporates the anticipated continuation of several global and industry headwinds, including the expected $0.90 to $1.00 of currency headwinds. Consensus estimates call for $4.65 in EPS on $13.88 billion in revenue for the fiscal year.

During this past quarter, Monsanto continued to execute on key initiatives within its core business, led by new global corn hybrid portfolio introductions, significant Intacta RR2 PRO soybean adoption, launch of its new Roundup Ready 2 Xtend varieties and continued progress within its digital agriculture platform with a series of extended partnerships.

The company also completed its $3 billion accelerated share repurchase agreements.

Hugh Grant, chairman and CEO of Monsanto, commented:

We continue to have a strong growth plan, backed by our commitment to delivering value to our customers through the industry’s most-proven integrated pipeline. Not only does this give us the confidence that we can deliver a baseline EPS CAGR in the mid-teens from the mid-point of our fiscal year 2016 guidance through fiscal year 2019, but it fuels our belief that we can continue to be the innovation engine for the industry and the partner of choice in leading agricultural solutions.

On the books, the company had cash, cash equivalents and short-term investments of $1.06 billion, compared to $3.75 billion at the end of the previous fiscal year.

Shares of Monsanto closed Tuesday down 0.6% at $86.10, with a consensus analyst price target of $99.84 and a 52-week trading range of $81.22 to $123.82.