Monsanto Adjusts FY16 Earnings Outlook; Q3 Profit Misses Estimates

(RTTNews) - Monsanto Company (MON) announced the company now expects fiscal 2016 as-reported EPS to be at the low end of the $3.36 to $4.14 adjusted range. In April, the company projected its fiscal 2016 as-reported earnings guidance to be in a range of $3.72 to $4.48 per share. The company adjusted its full-year as-reported EPS guidance range to reflect the Argentina-related tax matters and a favorable change in the expected amount and timing of restructuring expense.

Monsanto now anticipates being at low ends of its fiscal 2016 ongoing EPS guidance range of $4.40 to $5.10 given increased headwinds in third-quarter. The company remains on-track to deliver $165 million to $210 million in savings from its restructuring actions in fiscal year 2016, primarily benefiting operating expenses.

Looking ahead to fiscal 2017, assuming relatively stable currencies, the company expects a return to growth in EPS. The company targets mid-teens compounded annual EPS growth rate from the end of fiscal 2017 to fiscal 2021.

Hugh Grant, CEO, said: "While there is no formal update on the Bayer proposal, I have been personally in discussions with Bayer's management over the last several weeks, along with others regarding alternative strategic options."

Monsanto reported that its third-quarter net income to company decreased to $717 million from $1.14 billion, prior year. EPS on an as-reported basis was $1.63 compared to $2.39, prior year. EPS on an ongoing basis was $2.17, which excludes $0.54 for restructuring charges, environmental and litigation matters and a net charge of $219 million for tax matters related to the Argentina business. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $2.40 for the quarter. Analysts' estimates typically exclude special items.

The company said its third-quarter EPS performance was negatively affected year-over-year by the absence of the Scott's licensing agreement, glyphosate pricing declines, Roundup Ready 2 Xtend launch delay costs and lower soybean volume due to the delay, and India cotton pricing regulations.

Net sales for the third quarter were $4.19 billion versus $4.58 billion in the prior year period. Analysts expected revenue of $4.49 billion for the quarter.