It has been about a month since the last earnings report for Monsanto Company . Shares have added about 6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MON due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Monsanto Company reported weaker-than-expected results for the fiscal second quarter (ended February 2018).
Earnings
Quarterly adjusted earnings from ongoing business came in at $3.22 per share, missing the Zacks Consensus Estimate of $3.38. However, the bottom line came in higher than the year-ago tally of $3.19 per share.
Revenues
During the reported quarter, Monsanto generated revenues of $5,019 million, edging down 1.1% year over year. The top line also missed the Zacks Consensus Estimate of $5,489 million.
On a segmental basis, revenues from Seeds and Genomics dipped 2.3% year over year to $4,088 million. However, revenues from Agricultural Productivity were up 4.8% year over year to $931 million.
Cost & Margins
Monsanto’s cost of sales dropped 3.3% year over year to $2,053 million during the fiscal second quarter. Gross profit margin expanded 90 basis points (bps) to 59.1% during the quarter.
Operating expenses during the quarter came in at $1,070 million, down 1.7% year over year. Interest expenses were $105 million, up 2.9% year over year.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Monsanto had cash and cash equivalents of $2,409 million, higher than $1,856 million recorded at the end of fiscal 2017. Long-term debt was $6,635 million, as against $7,254 million recorded on Aug 31, 2017.
In the first half of fiscal 2018, Monsanto generated net cash of 1,630 million from operating activities compared with $1,537 million recorded in the year-ago period. Capital spending flared up 21.7% year over year to $661 million.
Outlook
Monsanto believes improved glyphosate pricing and elevated demand for innovative crop-yield enhancing solutions, such as Intacta RR2 PRO soybeans, will boost its near-term results.
The company expects that Bayer AG’s buyout deal will open up a number of opportunities for its business.
Bayer’s distinct crop-protection portfolio, when combined with Monsanto’s popular Climate FieldView and Seeds & Traits platform, is anticipated to give rise to a highly competitive seeds traits and agricultural chemicals behemoth in the industry.
The largest all-cash deal ($66 billion), which awaits regulatory approvals, is anticipated to close in second quarter of calendar-year 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower.
VGM Scores
At this time, MON has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, MON has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Monsanto (MON) Up 6% Since Earnings Report: Can it Continue?
It has been about a month since the last earnings report for Monsanto Company . Shares have added about 6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MON due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Monsanto Company reported weaker-than-expected results for the fiscal second quarter (ended February 2018).
Earnings
Quarterly adjusted earnings from ongoing business came in at $3.22 per share, missing the Zacks Consensus Estimate of $3.38. However, the bottom line came in higher than the year-ago tally of $3.19 per share.
Revenues
During the reported quarter, Monsanto generated revenues of $5,019 million, edging down 1.1% year over year. The top line also missed the Zacks Consensus Estimate of $5,489 million.
On a segmental basis, revenues from Seeds and Genomics dipped 2.3% year over year to $4,088 million. However, revenues from Agricultural Productivity were up 4.8% year over year to $931 million.
Cost & Margins
Monsanto’s cost of sales dropped 3.3% year over year to $2,053 million during the fiscal second quarter. Gross profit margin expanded 90 basis points (bps) to 59.1% during the quarter.
Operating expenses during the quarter came in at $1,070 million, down 1.7% year over year. Interest expenses were $105 million, up 2.9% year over year.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Monsanto had cash and cash equivalents of $2,409 million, higher than $1,856 million recorded at the end of fiscal 2017. Long-term debt was $6,635 million, as against $7,254 million recorded on Aug 31, 2017.
In the first half of fiscal 2018, Monsanto generated net cash of 1,630 million from operating activities compared with $1,537 million recorded in the year-ago period. Capital spending flared up 21.7% year over year to $661 million.
Outlook
Monsanto believes improved glyphosate pricing and elevated demand for innovative crop-yield enhancing solutions, such as Intacta RR2 PRO soybeans, will boost its near-term results.
The company expects that Bayer AG’s buyout deal will open up a number of opportunities for its business.
Bayer’s distinct crop-protection portfolio, when combined with Monsanto’s popular Climate FieldView and Seeds & Traits platform, is anticipated to give rise to a highly competitive seeds traits and agricultural chemicals behemoth in the industry.
The largest all-cash deal ($66 billion), which awaits regulatory approvals, is anticipated to close in second quarter of calendar-year 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower.
Monsanto Company Price and Consensus
Monsanto Company Price and Consensus | Monsanto Company Quote
VGM Scores
At this time, MON has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, MON has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.