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$MON 3Q15 PR: Total net sales were $4,579MM vs. $4,250MM in 3Q14 and net income was $1,141MM vs. $858MM in 3Q14. For the first nine months, net sales were $12.6Bil and gross profit $7.2Bil. Free cash flow was a use of $789MM for the first nine months of FY15 compared to a use of $1.4Bil for the same period FY14.
$MON’s Agricultural Productivity segment, which consists of crop protection products and herbicide products gross profit jumped 51% to $180MM on revenues of $888MM in 1Q18. This growth was mainly fueled by continued improvements in glyphosate pricing. Monsanto expects its dicamba manufacturing plant in Luling would be completed by 2020.
Strong demand for soybeans and pricing gains on glyphosate helped the US agriculture giant’s sales to remain flat during the first quarter of 2018. Total sales came in at $2.65Bil. Soybean, $MON’s second largest division under seeds and genomics segment, reported YoY sales growth of 21% to $728MM. Corn seeds net sales dwindled 17% during the quarter.
$MON, which is facing a deadline extension from Bayer for its $66Bil merger deal, posted 4Q17 sales of $2.7Bil, up 5% YoY. Agriculture industry’s DNA is set to change due to three mega-deals proposed by the chemical and agriculture companies. Recently, Syngenta accepted the $43Bil offer from ChemChina and DuPont-Dow announced their successful merger completion.
The Climate Corporation, a unit of $MON, has signed closing agreements to finalize AGCO's purchase of the Precision Planting LLC equipment business. AGCO will now assume ownership of Precision Planting, continuing the development of innovative products that improve efficiency and productivity.
In a bid to combat herbicide-resistant weeds, $MON and Valent, a subsidiary of Sumitomo Chemical Co., have expanded their tie-up on the 2018 Roundup Ready Plus Crop Management Solutions platform. Through this, soybean, corn and cotton growers can be more productive. Valent to offer Valor and Fierce brands as residual herbicides, among others.
For FY17, $MON expects to deliver approx. 30% growth in Soybean gross profit as well as strong margin improvement. Monsanto's Soybean gross profit growth in 3Q17 was 50%, driven primarily by the reduced cost of goods for Roundup Ready Xtend, increased acres planted to soybeans and benefit from the sale of those traded varieties.
$MON recently got the approval from EPA (Environmental Protection Agency) for RNA interference (RNAi), a new genetic engineering technology that controls the corn rootworm (“billion dollar pest”). The corn seed with RNAi is expected to be available in the market within 2-3 years. Notably, Monsanto’s 35% of net sales in 3Q17 came from corn seed.
For FY17, $MON expects GAAP EPS to be at the high end of $4.09- $4.55 range, and reaffirms non-GAAP EPS at the high end of $4.50-4.90 range. Monsanto, which will get acquired by Bayer in a $66Bil deal, said that it is working with Bayer toward completion of the pending merger by the end of 2017.
Who owns nature? With the "Big Six" agricultural giants set to become the "Big Four", the world’s biggest seed supplier $MON reported a slight increase in 3Q17 revenue. Revenue of Monsanto, which has got a global market share of 36% in corn seeds and 27% in soybeans, inched up 1% to $4.23Bil.
For 2017, $MON estimates operating expenses, excluding the pending Bayer transaction costs and restructuring expenses, to increase slightly. This increase is driven by the inflation and the costs associated with the return to growth of the business. Changes in currency rates is expected to have a relatively neutral effect on net income.
For 2017, $MON expects to grow corn gross profit even as the commodity prices remain challenging in the mid-to-high $3 range. Global soybeans gross profit is expected to be greater than 25%. In the Climate Fieldview Services business, the company is on track for 25MM paid acres in the U.S. in FY17.
$MON said that the trend line from WASDE (World Agricultural Supply and Demand Estimates) Report forecasts that annual demand for corn and beans is expected to rise. The company has nearly completed the initial phase of its $400MM Chesterfield R&D site expansion and expects to open it in later this year.
$MON, which is set to merge with Bayer, said that both companies are working towards closing the transaction at the end of 2017. The filing with the EU commission is expected to be completed in this calendar quarter. In the next 20 years, the company expects the level of the applying science and technology for crop production to grow further.