Monsanto Q1 Profit Misses Estimates; Agricultural Segment Sales Up 11%

(RTTNews) - Monsanto Company (MON) reported that its first-quarter EPS on an ongoing basis was $0.41, well above the prior year's $0.21, driven by the strong start to the business in South America. On average, 15 analysts polled by Thomson Reuters expected the company to report profit per share of $0.42, for the quarter. Analysts' estimates typically exclude special items.

First-quarter EPS on an as-reported basis was $0.38 compared to $0.07, previous year. Net income to Monsanto increased to $169 million from $29 million. Monsanto said the early indicators from the first three months, such as volume and pricing growth for INTACTA RR2 PROTM soybeans in South America, improved pricing in glyphosate and more than $85 million in gains from asset sales, signal that the company is well positioned to deliver on its business goals.

First-quarter net sales were nearly flat compared to the prior year's first quarter at $2.66 billion. Analysts expected revenue of $2.77 billion, for the quarter. Gross profit for the quarter grew slightly, to $1.3 billion.

For Monsanto's Seeds and Genomics segment, sales were $1.8 billion for the first quarter, down slightly compared to the same period last year. Sales for Agricultural Productivity segment were $888 million, up approximately 11 percent from prior year. The company said the primary contributor to the segment's growth in the quarter was stronger pricing, as generic pricing for glyphosate continues to improve.

Looking forward, Monsanto said it expects growth in pretax income for fiscal 2018, but did not provide specific financial guidance in light of the pending combination with Bayer. The expected growth drivers for Monsanto's business are continued improvements in pricing for glyphosate, plus the adoption of new technologies in Seeds and Genomics such as INTACTA RR2 PROTM soybeans, Roundup Ready 2 Xtend soybeans, Bollgard II XtendFlex cotton, and new corn hybrids around the world.

With regards to the recent passage of the U.S. tax reform legislation, Monsanto expects it to have a positive impact on the company's effective tax rate, beginning in fiscal year 2019. For the current fiscal year, early estimates indicate that the effective tax rate should not exceed 30 percent, and has the potential to be materially lower.