The 10-second takeaway
For the quarter ended Feb. 28 (Q2), Monsanto beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share increased significantly.
Gross margins dropped, operating margins increased, net margins increased.
Monsanto reported revenue of $5.47 billion. The 14 analysts polled by S&P Capital IQ expected sales of $5.27 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $4.75 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.73. The 18 earnings estimates compiled by S&P Capital IQ predicted $2.56 per share. Non-GAAP EPS of $2.73 for Q2 were 20% higher than the prior-year quarter's $2.28 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.) GAAP EPS of $2.74 for Q2 were 22% higher than the prior-year quarter's $2.24 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 56.1%, 90 basis points worse than the prior-year quarter. Operating margin was 38.6%, 50 basis points better than the prior-year quarter. Net margin was 27.1%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.47 billion. On the bottom line, the average EPS estimate is $1.74.
Next year's average estimate for revenue is $14.93 billion. The average EPS estimate is $4.55.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,830 members out of 2,969 rating the stock outperform, and 139 members rating it underperform. Among 579 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 552 give Monsanto a green thumbs-up, and 27 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Monsanto is outperform, with an average price target of $108.98.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends the following options: Long Jan 2015 $70 Calls on Monsanto and Long Jan 2015 $70 Puts on Monsanto. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.