Monsanto tops estimates on strong soybean results
2:06 PM MDT | April 4, 2014 | Rebecca Coons
Soybean sales and margin expansion lifted Monsanto's second-quarter results above expectations, and the company reaffirmed its fiscal 2014 guidance of mid-teens earnings growth.
The company reports net income of $1.67 billion for its fiscal second quarter ended 28 February, 12.7% higher year-on year (YOY). Earnings per share of $3.15 beat a $3.07 consensus of analysts' estimates compiled by Thomson Reuters. Sales increased 6.6% YOY, to $5.8 billion, led by a 6.9% YOY increase in seeds and genomics revenues.
"Nearly 80 percent of our growth in the quarter came from our core seeds and traits business, providing an important proof point that our business is on track and positioned well to deliver the growth we anticipated for 2014 even against a backdrop of greater variability in the agricultural sector this year,” says Hugh Grant, chairman and chief executive officer for Monsanto. “The performance speaks to the value our technology has demonstrated on the farm and the overall strength of our global business."
Seeds and genomics gross profits increased 10.9% YOY, to $2.9 billion, on sales up 6.9%, to $4.6 billion. Soybean gross profit increased 36.5% YOY, to $539 million, on sales up 21.1%, to $820 million. Soybean margins expanded by more than seven points, Monsanto says. The company adds that it reached three million acres of Intacta RR2 PRO soybeans, providing a "revolutionary new platform for Latin America soybean growers" and making it the largest launch of a soybean trait in the company's history.
Corn gross profit increased 8.2% YOY, to $2.3 billion, on sales up 4.1%, to $3.4 billion.
The company confirmed its fiscal year 2014 guidance for earnings per share of $5.00 to $5.20 on an ongoing basis and $5.02 to $5.22 on an as-reported basis, even with an estimated full year EPS effect of $0.15 to $0.20 from lower corn acres across the entire agricultural industry and currency fluctuations. Analysts' estimates are for $5.26/share.