Monsanto Company Earnings: What to Expect This Week

Many still find the seedmaker controversial, but can Monsanto keep its earnings growing?

Mar 30, 2014 at 1:31PM

Monsanto (NYSE:MON) will release its quarterly report on Wednesday, and investors are waiting patiently to see which direction the agricultural-products stock will move next. After having moved to six-year highs at the end of 2013, Monsanto has consolidated its gains, even as rivals DuPont (NYSE:DD) and Dow Chemical (NYSE:DOW) have made moves to capitalize more on the ag niche and come into more directly competition with Monsanto.

Monsanto generates huge controversy because of its sales of genetically modified seeds, but the company does a lot more than just making seed. Yet even though the seed side of the business makes up more than two-thirds of its current revenue, other areas, such as its herbicides and its farming-services segments, have huge amounts of growth potential. But will Monsanto be able to overcome both the negative reputation it has among many GMO-activist opponents as well as DuPont, Dow, and its other corporate rivals? Let's take an early look at what's been happening with Monsanto over the past quarter and what we're likely to see in its report.

Source: Monsanto.

Stats on Monsanto

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$5.81 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What's next for Monsanto earnings?
In recent months, analysts have had slightly pessimistic views on Monsanto earnings, cutting a nickel per share from their February-quarter estimates and $0.07 per share from their views for the current quarter. The stock has also suffered modest losses, falling about 2% since late December.

Monsanto's November-quarter results gave the ag company reasonably positive momentum coming into 2014, with sales gains of 7% and earnings rising 8% from year-ago levels. Although Monsanto's core seeds and genomics business actually saw gross profits fall for the quarter, the agricultural productivity segment more than made up for those losses, with herbicide demand in international markets helping drive results. In response, Monsanto gave favorable guidance for the remainder of fiscal 2014, citing emerging markets as a key part of the company's future.

But competition is only going to get tougher in the coming years. DuPont has made a major transformation in order to emphasize its agriculture and nutrition business, selling off other slower-growing business lines and seeking to divest itself of others. Similarly, Dow Chemical sold off its chlorine business in order to focus more on the bigger opportunities in the agricultural area.

Still, Monsanto is making strides toward developing an even wider moat. Between a large pipeline of seed products in soybeans, cotton, and wheat, as well as DroughtGard corn seeds that have outperformed similar products from DuPont and Syngenta (NYSE:SYT), Monsanto is looking for ways to deal with changing climate trends. At the same time, Monsanto has kept working on biological defenses against pests and disease, and Monsanto's Integrated Farming Systems business promises to give the farming community a one-stop platform to drive further improvements in crop yields.

One wildcard for Monsanto is whether anti-GMO sentiment will escalate into outright bans or other action. With many countries still refusing genetically modified crops, it's critical for farmers to be able to segregate GMO from non-GMO crops. Yet the potential for cross-contamination has led to disputes between farmers, and while Monsanto and its peers have done well in defending cases against them, the risk is that ag professionals won't be able to deal with the liability risk involved with Monsanto products.

In the Monsanto earnings report, watch for the breakdown between the seed and genomics business and the rest of Monsanto's operations. Further weakness in seeds could point to a longer-term downturn for the stock, but in the long run, the fundamentals still look strong for the ag giant's future.

3 stocks poised to be multi-baggers
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multibagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Click here to add Monsanto to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers