Monsanto profits are up on crop inputs and some residential products. What does this say about residential rebounds for households that can afford miraclegro/roudup products? I’m looking forward to watching the Syngenta deal unfold – one way or the other. I think it is a brilliant strategic move for Monsanto, but I question whether or not regulators will let it happen given its impact on the vertical chain. Cooperatives, many of which are themselves multi-billion dollar businesses, and many farmers are very cautious or even hostile to the takeover.[Click the title for the original, from the Wall Street Journal, June 24, 2015.]
Company expects fourth-quarter results to break even
By ANGELA CHEN
June 24, 2015 8:34 a.m. ET
Monsanto Co. said sales grew 7.7% in the third quarter, helped by strong performance in the agricultural productivity segment, and earnings handily beat analysts’ views.
Still, the world’s biggest seed company by sales said it expects fourth-quarter results to break even, while analysts most recently expected earnings of 31 cents.
In the latest quarter, sales in the agricultural productivity business, which consists of crop-protection products and herbicides [bold added], grew to $1.39 billion from $1.21 billion a year earlier. The increase was due partly to Monsanto’s recent decision to partner with Scotts Miracle-Gro Co. to expand how the lawn-and-garden firm can sell Roundup, which represents a significant portion of Scotts’ profit.
Corn seed and trait were $1.52 billion, up from $1.3 billion.
Soybean seed and traits sales grew to $835 million from $816 million.
In all, Monsanto reported a profit for the quarter of $1.14 billion, or $2.39 a share, up from $858 million, or $1.62 a share, a year earlier. Analysts had projected earnings of $2.07 a share, according to Thomson Reuters.
Revenue increased to roughly $4.58 billion from $4.25 billion a year earlier, though it was still below analysts’ expectations of $4.61 billion.
The company reaffirmed its full-year guidance.
Monsanto has recently faced challenges from farmers tightening their belts amid a steep decline in crop prices. The St. Louis-based company also has been contending with consumer criticism of biotech foods and has been rebutting a World Health Organization agency’s classification of its trademark weed killer as a potential carcinogen.
Shares, which edged up 0.2% in light premarket trade, have fallen about 5.6% this year through Tuesday’s close.
Write to Angela Chen at email@example.com