Published on March 17th, 2015 | by Daily Station Team

Monsanto (NYSE:MON)’s Weak Guidance after First Quarter Earnings


This Wednesday, before the markets opened, Monsanto (NYSE: MON) Corporation reported the earnings of the first-quarter of fiscal 2015. The compost and seed producer reported balanced EPS that is the diluted earnings per share of 0.50 dollars on income of 2.87 billion dollars. A year ago during this same quarter, Monsanto (NYSE: MON) reported an adjusted EPS of 0.69 dollars on an income of 3.14 billion dollars. These results of the first quarter and the performance of the company in the market correspond to the consensus estimates for earnings per share that was put forth by Thomson Reuters and predicted an EPS of 0.35 dollars and 2.8 billion dollars in income.

It was further reaffirmed by Monsanto (NYSE: MON) that the guidance for its fiscal 2014 for earnings per share was 5.75 dollars to 6.00 dollars. At this point the company also asserted by the previous estimates for FCF of 2.0 billion dollars and total cash from operating activities somewhere in the range of 3.2 billion dollars to 2.6 billion dollars.

It is now expected by the company the earnings if its second quarter would be down by at least 5 to 10 percent as far as YOY earnings are concerned. These estimations are made in light of Monsanto (NYSE: MON)’s performance which was somewhat better than what was being anticipated. Yearly income development will come in the third and fourth quarters the organization said. Monsanto (NYSE: MON) anticipates that the final quarter will be broken-even back to the original investment to positive YOY income.

According to the current consensus, the earnings per share for the second quarter of this fiscal year is 3.14 dollars, and the EPS for this same time last year was 3.15 dollars. Now, from what is known of Monsanto (NYSE: MON)’s new guidance, it is expected that the earnings of the second quarter would be about 2.84 to 2.99 dollars per share. As per the consensus of 2015, the estimate for the full year is 5.89 dollars.

The Chief Executive Officer, Hugh Grant recently said that the near-term headwinds in the agriculture business continue to be, but the capacity of the company to deliver new answers to the problems of farmers and to assist them in improving the yield of their crops by utilizing proper resources provides the company with the opportunity to deliver growth results in the current situation and the one to come in the future.

Both of the Monsanto (NYSE: MON)’s significant divisions posted relatively lower incomes and low gross benefits this quarter as compared to the same one a year ago. The key to this per-share uptick could be stock buybacks of fiscal 2015. The organization reported a little more than 489 million dollars completely diluted shares just before the first quarter ended, contrasted to about 533 million towards the end of the first quarter of fiscal 2014. The share buybacks of last year added about 0.05 dollars for every share to the earnings per share of the first quarter.

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