Monsanto Q4 Loss Wider Than Estimates, Sees 2015 Earnings Below View

(RTTNews) - Agricultural products giant Monsanto Co. (MON) on Wednesday reported a loss for the fourth quarter that narrowed from last year, reflecting higher revenues in the seeds and genomics as well as agricultural productivity segments.

However, ongoing loss per share for the quarter was wider than analysts' expectations, while revenues beat their estimates. Looking ahead, the world's largest seed company forecast earnings for fiscal 2015, also below Street estimates.

St. Louis, Missouri-based Monsanto's net loss for the fourth quarter was $156 million or $0.31 per share, narrower than loss of $249 million or $0.47 per share in the prior-year quarter.

The latest quarter's results include loss of $0.04 per share for a legacy environmental settlement.

Excluding items, ongoing loss for the quarter was $0.27 per share, compared to loss of $0.47 per share in the year-ago period. On average, 21 analysts polled by Thomson Reuters expected the company to report loss of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 20 percent to $2.63 billion from $2.20 billion in the same quarter last year and beat analysts' consensus of $2.42 billion.

Segment wise, seeds and genomics revenues for the quarter increased 16 percent from last year to $1.38 billion. Of this, corn seeds and traits sales increased almost 2 percent to $630 million, while sales for soybean seed and traits more than doubled to $199 million.

In the agricultural productivity segment, which consists of the crop protection products and lawn-and-garden herbicide products, net sales increased 23 percent from last year to $1.25 billion.

Monsanto's gross profit margin for the quarter improved 500 basis points from the year-ago period to 47 percent.

For fiscal 2014, Monsanto's net income increased to $2.74 billion or $5.22 per share from $2.48 billion or $4.60 per share in the previous year. Ongoing earnings per share for the year were $5.23, compared to $4.56 in the prior year.

Net sales for the year grew 7 percent to $15.86 billion from $14.86 billion last year.

Street expected the company to earn $5.21 per share for the year on revenues of $15.68 billion.

Looking ahead to the first quarter, Monsanto projects its earnings to be roughly half of the total earnings in the previous-year quarter. Analysts expect the company to earn $0.79 per share for the quarter.

The company noted that macro conditions have resulted in lower planted acres for key regions in both corn and cotton in the first quarter, combined with a timing shift as the company moves more of its agricultural productivity business to branded-product sales.

Monsanto expects second-quarter earnings to be relatively flat year-over-year, with a significant uptick in third-quarter earnings reflecting the timing shifts and business growth in its largest markets. For the fourth quarter, the company projects earnings to be break-even to positive year-over-year on an absolute basis.

For fiscal 2015, Monsanto said it is positioned to deliver strong double-digit to mid-teens earnings growth in the year. The company forecast earnings in a range of $5.75 to $6.00 per share. Analysts expect the company to report earnings of $6.03 per share for the year.

Monsanto noted that its growth outlook is anchored on the continued strength of its core business, with the seeds and genomics segment setting the pace for overall earnings per share growth in fiscal year 2015.

Monsanto affirmed its long-term target to at least double full-year ongoing earnings per share over the next five years, driven by combination of strong core business, new platforms and capital structure.

MON closed Tuesday's trading at $108.23. In Wednesday's pre-market activity, the stock is up $0.02 or 0.02 percent to $108.25.