Monsanto has posted its first quarter results for 2014 which, it says, delivered earnings per share ahead of expectations.
“We made significant progress on key milestones in the first quarter that reinforce the confidence we have in delivering in fiscal year 2015 and over the multi-year horizon,” said Hugh Grant, chairman and chief executive officer for Monsanto.
It also highlighted several key first-quarter milestones, including strong soybean results driven by Intacta RR2 PRO as the product is projected to exceed its 10-12 million acre target.
The company also said that the USDA’s final Environmental Impact Statement concluding that Monsanto’s Roundup Ready 2 Xtend soybeans and Bollgard II XtendFlex cotton should be fully deregulated. During its annual update, Monsanto highlighted advancements across the industry’s broadest research and development pipeline, including its breeding, biotechnology, crop protection, microbials, BioDirect and Climate platforms.
“The differentiator for our business remains our focus on continued innovation both in our core business and new platforms.
“The near-term headwinds in agriculture persist, but our ability to deliver new solutions to help farmers improve yields while efficiently using resources provides the opportunity to deliver growth in both the current environment and over the longer-term.”
Outlook
The company confirmed its fiscal year 2015 ongoing earnings per share guidance of $5.75 to $6.00. Full-year 2015 EPS guidance on an as-reported basis is expected in the range of $5.78 to $6.03 per share.
Following a stronger than expected first quarter and what now appears to be lower US corn acres, the company now expects second quarter ongoing earnings per share to be down in the range of 5-10% versus the prior year. This leaves growth for the year to the third and fourth quarters, the latter of which Monsanto continues to expect is break-even to positive year-over-year on an absolute basis.
With the expectation of lower global corn acres, the seeds and genomics gross profit growth percentage for the year is now expected to be more in the range of high single digits.
The company continues to see its next generation of soybean technologies as being a core factor in delivering gross profit growth in the segment for the fiscal year, as underscored by the more than $100 million in gross profit growth and seven points of margin lift in soybeans in the first quarter. The company also expects growth in its corn business for the full year, from a combination of share gains and price mix lift in its portfolio.