Monsanto Value Drops After Revising Outlook Down
‘Growth Story’The overall agriculture economy is set to turn around, Fraley added. Corn and soybean demand is increasing, and farmer incomes will be better than projected as they save on crop and fuel inputs this year and land rents ease. He said Monsanto is looking at buying smaller companies. “Despite vagaries in the market, our growth story is still intact,” Grant said. There could be “a slingshot effect" in 2017 as new products enter the market, he said. The company said earlier on Wednesday it now sees profit excluding one-time items of $4.40 to $5.10 a share in the fiscal year through November, compared with a January prediction of $5.10 to $5.60. It cited pressure on glyphosate prices, the devalued Argentine,
- For the fiscal second quarter, Monsanto now expects earnings per share of $2.35 to $2.45, excluding one-time items. The average of 19 analysts’ estimates compiled by Bloomberg was for $2.84.
- For the revised forecast, 25 cents to 30 cents a share is accounted for by currency, Monsanto said. Another 30 cents is from "macro factors" weighing on the seeds and genomics business, the company’s largest by revenue.
- The company cut its full-year free cash flow projection to $1.4 billion to $1.6 billion from $1.6 billion to $1.8 billion.
- It now sees "relatively flat" full-year gross profit growth from seeds and genomics. Its agricultural productivity business’s gross profit will now be closer to the mid-point of the range of $900 million to $1.1 billion.
- Full-year operating expenses, excluding costs related to restructuring and environmental and litigation settlements, are seen down slightly.