Monsanto (NYSE:MON) is seeing a little more green in its third-quarter earnings, although its expectations for its full year may not please everyone. A look at the whole picture, though, suggests the agribusiness giant may be in for bumper results over the long term.

The company now sees its third-quarter bottom line for ongoing business coming in at $0.85 per share, a healthy upside to the Wall Street consensus estimate of $0.69. Full-year earnings from ongoing operations, though, are forecast at $1.55 to $1.60 a share. Even at the high end of the range, this is below the consensus figure of $1.64.

Monsanto explained that fourth-quarter earnings will be hurt by continued erosion in its Roundup herbicide segment, which is suffering from generic competition. Despite the company's efforts to cut back expenses and make pricing competitive, competitors continue to make inroads. Examined in this context, Monsanto's intense work in genetically modified (GM) seeds and traits is understandable.

Much of the firm's GM work has concentrated on Roundup Ready crops, which are resistant to their herbicide namesake. When Roundup's margins were stronger, selling these seeds had the nice effect of boosting both the biotech and the herbicide businesses. With this era now past, Monsanto seems to be shifting its focus to other traits. The most advanced candidate in this effort is insect-resistant corn, while further back in the development process, the company is experimenting with insect-protected soybeans and drought-resistant corn.

Not many people would use the word "exciting" to describe plants. But Monsanto's efforts, if successful, have huge potential, both in the developed and the developing world. That's not to say that the firm is invulnerable. It has plenty of powerful competitors, including DuPont (NYSE:DD), Syngenta (NYSE:SYT), and BASF (NYSE:BF). In addition, wariness of GM organisms remains strong, a sentiment seen most recently in the European Union's failure to approve the importation of Monsanto's GM oilseed rape.

On at least one measure, though, Monsanto gives reason for optimism. When W.D. Crotty wrote his piece on the firm back in March, it was projecting $350 million in free cash flow (FCF) for 2004. Now, this forecast has jumped to $500 million. As result, the stock's forward FCF multiple has shrunk from 27 to 19. That should be enough to give investors food for thought.

Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.