Monsanto Q2 Profit Beats Estimates; Updates Outlook

(RTTNews) - Monsanto Company (MON) reported earnings per share of $3.19 on an ongoing basis for the second quarter of fiscal year 2017 compared to $2.42, prior year. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $2.79, for the quarter. Analysts' estimates typically exclude special items. The company said its performance was driven in part by strong gross profit growth from its corn and soybean businesses, the absence of the Argentine peso devaluation and benefit from the sale of its Latitude wheat fungicide business. On an as-reported basis, earnings per share was $3.09 compared to $2.41.

Second-quarter net income attributable to Monsanto increased year-over-year to $1.37 billion from $1.06 billion, prior year. Gross profit for the quarter also increased over the prior year period to $3.0 billion versus $2.6 billion for the prior year period.

Monsanto's net sales for the quarter increased to approximately $5.07 billion, up from $4.53 billion in the prior year period. Analysts expected revenue of $4.73 billion, for the quarter.

Monsanto updated its fiscal year 2017 as-reported EPS guidance to be at the high end of the range of $3.95 to $4.44. On an ongoing basis, fiscal year 2017 ongoing EPS is also expected to be at the high end of the range of $4.50 to $4.90. From a gross profit perspective, the company continues to expect the Seed and Genomics segment gross profit to increase mid-single digits as a percent year-over-year. Within its Ag Productivity segment, gross profit is still expected to be in the range of $850 to $950 million, though now at the lower end of the range.

For third quarter, the company expects as-reported earnings per share to be roughly flat due to the absence of Argentine-related tax matters call-out of $0.50 per share, mostly offset by the expected decline in ongoing earnings per share, from the absence of the alfalfa deal, which equaled roughly $0.34 of earnings last year, and the volume timing shift from third quarter to second quarter in the Europe and U.S. corn businesses.

For the full year, the company now anticipates its earnings to translate to the high end of the range of $1.2 billion to $1.6 billion of free cash flow, reflecting operating cash flow at the high end of the range of $2.4 billion to $2.8 billion and capital expenditures of $1.2 billion for fiscal 2017.