On a quarterly basis, the irrigation equipment specialist saw revenues double, while per-share earnings nearly tripled to $0.90 diluted. Full-year results were nearly as fantastic.
Over the summer, I singled out CNH Global
Or do they?
The company fell far short of affirming a strong near-term outlook, saying instead that it was unable to assess the impact of recent commodity weakness and credit-market mayhem. Lindsay provided some reasons to be optimistic -- including the USDA's projection of 10% higher farm income this year -- but if you wanted to be told that everything would be OK, you tuned into the wrong call yesterday.
One handy figure Monsanto cited was a debt-to-asset ratio for U.S. farmers of 10% to 12%. That's quite a bit less leverage than firms like Deere
Monsanto also discussed the willingness of Latin American governments to provide liquidity to their farmers. Combine that with Lindsay's comments about China's support for irrigation systems, and global agricultural sectors seem pretty well-supported.
While I would not be (small-f) foolish enough to rule out damaging spillover effects from the wobbly financial system, agricultural cycles largely follow their own drumbeat. In this kind of market, that's about the best opportunity you can ask for. Stay alert, but I wouldn't get too anxious about agriculture just yet.