Monsanto Q3 Adj. Profit Tops View, But Revenues Miss; Backs 2015 Outlook

(RTTNews) - Agricultural products giant Monsanto Co. (MON) reported Wednesday a profit for the third quarter that increased 33 percent from last year, reflecting improved margins and revenue growth. Ongoing earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also reaffirmed its ongoing earnings guidance for full-year 2015.

The St. Louis, Missouri-based world's largest seed company reported net income of $1.14 billion or $2.39 per share for the third quarter, higher than $858 million or $1.62 per share in the prior-year quarter.

Excluding special items, ongoing earnings per share for the quarter was $2.39, compared to last year's $1.62. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $2.07 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 7.8 percent to $4.58 billion from $4.25 billion in the same quarter last year, but missed sixteen Wall Street analysts' consensus estimate of $4.61 billion.

Segment wise, seeds and genomics revenues grew 4.9 percent to $3.19 billion, with corn seeds and traits sales accounting for nearly half of it and increasing 16.9 percent. In the Agricultural Productivity segment, net sales increased 14.9 percent to $1.39 billion from last year.

Gross profit margin for the quarter improved 500 basis points to 60 percent from last year's 55 percent.

Looking ahead to fiscal 2015, Monsanto said it continues to expect earnings at the low end of the range of $5.80 to $6.05 per share and ongoing earnings at the low end of the range of $5.75 to $6.00 per share. Street is currently looking for full-year 2015 earnings of $5.77 per share.

Further, Monsanto confirmed its full-year 2015 free cash flow guidance of $2 billion to $2.2 billion, but at the low-end.

The company said its fourth-quarter results are now expected to be break-even.

"Equipping farmers with the right set of innovations that will help solve tomorrow's food challenges today requires more than a new company - it requires a new vision and approach. Our proposal to combine with Syngenta is an exciting logical next step for our business, offering the opportunity to accelerate innovation and support a more diverse group of farmers around the world," Chairman and CEO Hugh Grant said.

The company noted that its proposal to combine with Swiss crop chemicals firm Syngenta AG (SYT) is an exciting logical next step for its business, offering the opportunity to accelerate innovation and support a more diverse group of farmers around the world.

Monsanto has also reiterated its vision and strategic rationale for the Syngenta proposal to create a new company that would provide a comprehensive portfolio of integrated solutions to help farmers around the world address current and future agricultural, environmental and sustainability challenges.

Monsanto recently made an unsolicited proposal to acquire Syngenta at a price of 449 Swiss francs per Syngenta share with around 45 percent in cash. The offer was unanimously rejected by Syngenta's Board of Directors.

MON closed Tuesday's regular trading session at $112.78, down $1.36 on a volume of 3.10 million shares. The stock has been trading in a range of $105.76 to $128.79 in the past 52 weeks.