Monsanto (MON) Misses Q2 EPS by 3c

Monsanto (NYSE: MON) reported Q2 EPS of $2.90, $0.03 worse than the analyst estimate of $2.93. Revenue was $5.18 billion, versus the consensus of $5.58 billion.

Outlook

The company affirmed its previously announced EPS guidance outlined at the beginning of the fiscal year, although noted it was now trending to the low end of the range. Fiscal-year 2015 ongoing earnings per share guidance is expected to be in the low end of the range of $5.75 to $6.00. Full-year 2015 EPS guidance on an as-reported basis is expected in the low end of the range of $5.80 to $6.05 per share. (For a reconciliation of EPS, see note 1.) The EPS guidance is inclusive of what is now expected to be a $0.35 to $0.40 headwind for this fiscal year driven by the significant deterioration of several key currencies versus the U.S. dollar.

*** The Street is looking for FY15 EPS of $5.83 and revenue of $16.12 billion.

The company also is tracking to the lower end of its original free cash flow guidance of $2.0 billion to $2.2 billion, as it now estimates net cash provided by operating activities to be $3.0 billion to $3.3 billion and net cash required by investing activities to be approximately $1.0 billion to $1.1 billion. (For a reconciliation of free cash flow, see note 1.)

The Seeds and Genomics segment gross profit growth percentage for the full year is now expected to be low-to-mid-single digits, while the company’s Agricultural Productivity gross profit is still expected to be down approximately 10 percent versus the prior year due to anticipated generic glyphosate price softening and an incremental 2-to-3 percent due to deteriorating currencies.

Executives noted the company will continue to focus on disciplined operational spend as a hedge to the current macro trends, as well as to enable incremental spend to support new platform opportunities. Total operating expenses, inclusive of new platform spend, are now expected to be down in the range of 3-to-5 percent versus the prior year.

As the company looks to the second half of the year, it expects roughly 80 to 85 percent of the remaining earnings per share to fall into the third quarter, with the residual in the fourth quarter.

For earnings history and earnings-related data on Monsanto (MON) click here.

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