Monsanto Company (NYSE: MON) forecasts are better than estimated

Monsanto Company (NYSE: MON) in the first quarter of 2017 returned to profitability. The group reported the net profit attributable of $29 million, as compared to a loss of $253 million a year earlier. The company has posted the earnings per share of $0.07 beating the consensus analysts’ forecasts of $0.01 in 1Q 2017. After adjusting for restructuring, merger, and other extraordinary charges, the adjusted earnings per share came to be $0.21 compared to the loss per share of $0.11 in the corresponding quarter last year. This is due to the expected strong start to the business in South America and currency effects. Moreover, in the first quarter MON has reported the 19% growth in the sales to $2.65 billion beating the analysts’ expectation of 2% regrowth in the sales. The company had reported the sales $2.2 billion in the prior year period.

For the fiscal year 2017, MON has given an upward guidance, which now expects the earnings per share to be in the range of $3.97 to $4.45, as compared to the previous guidance for earnings per share to be in the range of $0.10 and $0.14. However, MON has left the adjusted earnings guidance unchanged, and still expects it to be between $4.50 and $4.90 after taking one-time items into account. The operating cash flows are expected to be $2.4-to-$2.8 billion and $1.4-to-$1.6 billion of free cash flows, after deducting an estimated $1.0-to-$1.2 billion of investing cash flows. These investing cash flows shows the planned investment in the company’s dicamba manufacturing facility and takes into account the successful sale of the precision agriculture equipment business.

Additionally, MON has signed an agreement with Japanese trading firm Mitsui & Co. to sell its Latitude wheat and barley fungicide seed treatment business for $140 million. The company expects to get an EBIT benefit of about $85 million in that business segment in the second quarter. Therefore for 2Q 2017, MON expects the reported earnings per share to be almost $0.20 to $0.50 better than the prior year.

On the other hand, MON in 2017 will focus on delivering on its operational plan and key business milestones as well as simultaneously work with Bayer on the necessary steps to get the merger of the companies finalized, which is targeted to be complete by the end of the calendar year 2017.

MON stock has a consensus  “Strong Buy “recommendation with an average price target of $122, a further upside of 15.96% (Source:

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