Monsanto Posts Q1 Loss; Sales Miss View

(RTTNews) - Monsanto Co. (MON) reported a net loss for the first-quarter of 2016, compared to profit in the prior year. The latest-quarter results included $0.46 for restructuring charges.

The adjusted loss per share for the quarter was narrower than analysts' expectations, but revenues missed their estimates.

The company expects fiscal year 2016 ongoing earnings per share guidance to be at the lower half of the range of $5.10 to $5.60. The fiscal year 2016 earnings per share guidance on as as-reported basis improved modestly to $4.12 to $4.79 as a result of the anticipated timing of charges related to announced restructuring actions.

Net loss attributable to company for the first-quarter was $253 million or $0.56 per share, compared to net income $243 million or $0.50 per share in the prior year. The latest-quarter results included $0.46 for restructuring charges, driven by the finalization of the company's plans to reach its previously outlined target of $500 million of annual savings by the end of fiscal year 2018.

The company's first quarter loss per share of $0.11 on an ongoing basis, ahead of the company's outlined guidance of a loss in the range of $0.23 to $0.33 per share. Analysts polled by Thomson Reuters expected the company to report a loss of $0.23 per share for the first-quarter. Analysts' estimates typically exclude special items. The improvement was driven by lower than expected operating expenses and higher than expected Brazil Intacta RR2 PRO soybean results. Earnings per share from ongoing business for the prior year quarter were $0.47.

Net Sales for the first-quarter declined to $2.22 billion from $2.87 billion in the prior year. Wall Street expected revenues of $2.39 billion for the quarter. Gross profit on an as-reported basis for the 2016 first quarter also decreased over the prior year period to $901 million. The decline in the quarter was due to weaker foreign currencies, glyphosate pricing and lower corn volumes in Latin America.

With the anticipated continuation of several global and industry headwinds that include the recent currency devaluation in Argentina, Monsanto expects fiscal year 2016 ongoing earnings per share guidance to be at the lower half of the range of $5.10 to $5.60. Ongoing earnings per share guidance reflects in part an estimated $0.60 to $0.70 of headwinds from currency, greater than previous estimates of $0.35 to $0.40.

The fiscal year 2016 earnings per share guidance on as as-reported basis improved modestly to $4.12 to $4.79 as a result of the anticipated timing of charges related to announced restructuring actions. The company said in November 2015 that it expected earnings per share on an as-reported basis to be $4.00 to $4.66 in fiscal year 2016.

The company now expects five to seven percent gross profit growth from its core Seeds and Genomics segment in fiscal year 2016. This growth is expected to be led by new global corn hybrid portfolio introductions, continued significant Intacta RR2 PRO soybean adoption and additional licensing opportunities in the range of $275 million.

The company also expects the Agricultural Productivity segment to continue to deliver $900 million to $1.1 billion of gross profit in fiscal year 2016 as the company stays consistent with its strategy to maintain a slight premium over generics.

The company executives reinforced today that a focus on key priorities and milestones in fiscal year 2016 is expected to set the foundation for rapid future growth. The company's expanding core growth drivers and R&D leadership advantage, emergence of new platforms and financial discipline all underpin confidence in its growth target. The company expects innovation to drive 80 percent of the expected $3.5 billion in gross profit growth from the end of fiscal year 2016 to fiscal year 2019.

The company targets ongoing and as-reported earnings per share CAGR in excess of 20% from end of fiscal year 2016 to fiscal year 2019.