Post Earnings Coverage as Monsanto Earnings and Revenue Slide

LONDON, UK / ACCESSWIRE / June 30, 2016 / Active Wall ST announces its post-earnings coverage on Monsanto Co. (NYSE: MON). The company announced its Q3 FY16 earnings results on Wednesday, June 29, 2016, reporting a steeper than expected decline in third quarter profit and revenue, as it continues to battle agricultural headwinds. Register with us now for your free membership and see our complete earnings coverage on this equity at:

http://www.activewallst.com/register/

Today, AWS is promoting its earnings coverage on MON. Get all of our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=MON

Earnings Reviewed

For the three month ended on May 31, 2016, Monsanto’s overall profit tumbled 37% to $717 million, or $1.63 per share, as compared to profit of $1.14 billion, or $2.39 per share, in the year ago period. Adjusted earnings of $2.17 per share were lower than analysts’ consensus estimates of $2.40 per share. For Q3 FY16, revenue declined 8.5% to $4.19 billion as compared to revenue of $4.58 billion in Q3 FY15, also missing analysts’ estimates of $4.49 billion.

In Q3 FY16, revenue from the agricultural productivity segment plunged by almost 30% as compared to Q3 FY15. This was primary attributed to the discontinuation of its licensing deal with Scotts, which generated $274 million in revenue in Q3 FY15. Elsewhere, the key seeds and genomics segment held up better. The overall segment revenue rose slightly, with weak sales of soybeans and cotton offset by corn and Monsanto’s other-crops category.

The seeds and pesticides maker is grappling with a multiyear slide in major crop prices that has reduced farmers’ income and has forced farm supply companies to tighten their own belts. The company’s profit has also come under pressure from strong U.S. dollar and price cuts triggered by competitors. Monsanto is also facing additional challenges such as declining price of the herbicide, glyphosate, restrictions by the Indian government on cottonseed pricing, and a continuing wait for approval of a new soybean variety from the European Union which Monsanto hopes to be a blockbuster.

Negotiation on Bayer Deal

The disappointing quarterly results will be seen as a setback to Monsanto’s efforts to negotiate a higher bid from German conglomerate Bayer, which in May 2016 offered $122 per share, worth $62 billion including $8.3 billion of net debt. Monsanto deemed the offer as too low, but signalled that it was open to negotiating further. Monsanto said it has been in talks with Bayer over the last few weeks, but gave no official update. The company has also held talks with others as an alternative to the Bayer’s offer.

Negotiations with Bayer could be complicated by headwinds the industry is facing, Bayer’s share price has declined recently, while the Euro has plunged against the dollar following Brexit. Bayer had planned to finance 25% of the deal by selling shares, while the bulk of the cash will be raised using U.S. dollar-denominated bonds.

Guidance

Monsanto expects its FY 2016 earnings to come in at the low end of its guidance range of between $4.40 and $5.10 per share. The company said it remains on track to deliver $165 million to $210 million in savings from its restructuring actions in FY 2016, primarily benefiting operating expenses. Beyond FY 2016, the company said it continues to target a mid-teens compounded annual growth rate in earnings per share from FY 2017, now advancing to FY 2021.

Stock Market Reaction

Monsanto’s shares gained 2.40% to finish the trading session at $103.52 on Wednesday, post its earnings release. Since the beginning of the year the company’s shares have gained 6.32%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated directly or indirectly for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst [for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 441858