Agricultural products maker Monsanto Co. (MON) is scheduled to report fourth-quarter results before the market opens Wednesday.
The St. Louis, Missouri-based company, an S&P 100 component, has two segments - Seeds and Genomics and Agricultural Productivity. In fiscal 2009, over 62% of the company's sales were generated by the Seeds and Genomics, and the rest came from the Agricultural Productivity division.
The past few quarters have not been impressive for Monsanto, with sales showing declines in the light of the recession as well as a drop in prices of corn and soybeans. Roundup, formerly the company's cash cow, has been off patent for ten years and faces low-cost generic competition from Chinese producers.
Credit Suisse said last month that at its 23rd Annual Chemical & Agricultural Science Conference in New York, nine companies, including Monsanto and peer EI DuPont de Nemours & Co. (DD), spoke on their agricultural business trends and outlooks, and the tone was very bullish.
At the conference, Monsanto presented early Southern corn harvest results, which showed an 8.5 bushel per acre yield advantage in its trait product VT Triple PRO over competitive products. The company also expects its SmartStax corn and Roundup Ready 2 Yield soybean products to demonstrate favorable yield results.
"In the fertilizer market, global farmer and dealer sentiment is much improved on the back of rising crop prices, and producers see the positive fertilizer demand and price momentum continuing. In the seed market, producers are optimistic on the performance of their respective products, but acknowledged that the proof lies in the upcoming fall harvest yield results," the brokerage said.
Monsanto said previously that it expects fourth-quarter results on a reported basis to range between a loss of $0.11 per share and a profit of $0.09 per share. On an ongoing basis, the company said it anticipates that results will be in a range of loss of $0.09 per share and profit of $0.11 per share.
However, the company said in late August that it has extended its restructuring program to cover an estimated $180 million pre-tax to conclude the crop protection strategic alignment and to better align the resourcing for corporate supporting functions. About $150 million of the charge is to be recorded in the fourth quarter. The restructuring charge will affect as-reported earnings per share by about $0.22 and will be primarily reflected in fiscal year 2010, with the remaining charge in fiscal year 2011, the company said.
On average, 14 analysts polled by Thomson Reuters expect the company to lose 6 cents in the quarter, with the loss estimate ranging from 3 cents to 9 cents. Revenue is estimated to be $1.82 billion. Analysts' estimates typically exclude special items.
In the year-ago quarter, the company reported a net loss of $233 million or $0.43 per share. Excluding items, earnings totaled $0.02 per share. Net sales amounted to $1.88 billion.
In the third quarter of the current fiscal, the company's net income was $384 million or $0.70 per share, which included $0.11 per share in restructuring charges. Third-quarter net sales declined 6% to $2.96 billion.
While announcing the third-quarter results, Monsanto affirmed its earnings outlook for fiscal year 2010 of $2.15-$2.41 per share on an as-reported basis, and $2.40-$2.60 per share on an ongoing basis. In late August, the company revised the ongoing earnings outlook, stating it expects earnings of $2.40 to $2.45 per share now. The revision reflects restructuring charges related to its Roundup business.
For the full year, Wall Street expects a profit in the range of $2.30-$2.50 per share, with a consensus of $2.43 per share. Fiscal-year revenues are estimated to be $10.42 billion.
Deutsche Bank said recently that when Monsanto announces results today, the focus of the call will be on yield results and fiscal 2011 guidance, as the company has already preannounced an earnings shortfall for the quarter.
The brokerage also lowered its fiscal 2011 earnings forecast for the company to $2.80 from $2.90 per share to reflect the management's "mid-teens" earnings growth target as well as costs Monsanto could incur under its grower satisfaction program. Deutsche Bank reiterates Monsanto at "Buy" while price target was reduced to $65 from $70.
Monsanto shares fell 8% on September 28 to close at $48.75 from the prior close of $53.07, on concerns that its biotech corn SmartStax yields in Iowa are coming in below those of its triple stack seeds. Monsanto pins much of its hope on this new seed to drive sales. It is also expected to serve as a launch pad for new genetic traits. The company is likely to update on this issue at the conference call today.
Among peers, DuPont is slated to report third-quarter results on October 26. Wall Street expects earnings of $0.33 per share on revenues of $6.75 billion.
MON closed Tuesday at $48.80, up $1.03 or 2.16%, on 9.87 million shares and added $0.20 in the extended trade. For the past year, the stock has been trending in the range of $44.61-$87.06.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.