Monsanto, DuPont post quarterly financial results

Monsanto, DuPont post quarterly financial results

Monsanto reveals positive financial results, while DuPont revises 2014 ag outlook.

MONSANTO Co. recently revealed that it delivered solid results for the third quarter of fiscal 2014 and raised its guidance from its previously announced ranges for the full fiscal year.

The company announced a target to at least double full-year ongoing earnings per share (EPS) by the end of fiscal 2019 based on its core business and the transformational potential of its new platforms. With the updated long-term outlook, Monsanto also announced a new $10 billion share repurchase authorization.

For the third quarter, Monsanto reported ongoing and as-reported EPS of $1.62. Despite greater headwinds across the industry, the company raised its full-year outlook to the upper end of its previous guidance ranges for both ongoing EPS and free cash flow, with an ongoing EPS guidance of $5.10-5.20 and an as-reported EPS guidance of $5.12-5.22.

"Through the third quarter, we're on track for seeds and traits to drive a majority of our full-year growth. That performance in a more challenging agricultural environment speaks to the breadth and customer value of our product portfolio," Monsanto chairman and chief executive officer Hugh Grant said. "Coupled with an expanding portfolio of solutions for farmers, this provides confidence to target at least doubling our ongoing earnings per share over the next five years and evolve our capital allocation priorities, including an additional $10 billion share repurchase authorization that further enhances Monsanto's ability to return value to our shareowners."

Outlining its long-term target for fiscal 2019, the company said it expects the largest driver of overall growth over the next five years to come from the established core seeds and traits business, with an expected contribution of more than $4 billion in total incremental gross profit growth during that period.

At the same time, Monsanto said it continues to make strong progress with new platforms, including its Climate Corp. platform, which is expected to contribute a key part to Monsanto's strategy and earnings profile during this five-year growth horizon.

The company achieved solid third-quarter and year-to-date results that continue to reflect strong performance across the expected portfolio contributors of its business. Net sales were $4.3 billion for the quarter and $13.2 billion for the first nine months (Table).

Operating expenses were up $58 million in the third quarter compared to the prior year due, in part, to additional costs as Monsanto invests in its precision agriculture and biologicals platforms. In the three-month comparison, selling, general and administrative expenses remained flat as a percentage of sales, while quarterly research and development expenses were up $35 million over the prior-year period.

Net sales for the Agricultural Productivity segment for the first nine months of fiscal 2014 increased $357 million over the same period last year.

 

DuPont

DuPont, meanwhile, recently announced that it is revising its outlook downward for operating EPS for its second quarter and full year in 2014 due primarily to lower-than-expected quarterly performance for its Agriculture and, to a lesser extent, Performance Chemicals segments.

DuPont said it expects operating earnings in the second quarter to be moderately below the $1.28 per share recorded in the same period last year. As a result, the company decided to lower its full-year outlook for operating earnings to $4.00-4.10 per share.

The revised outlook in the Agriculture segment reflected lower-than-expected corn seed sales and higher-than-expected seed inventory write-downs.

Given favorable soybean economics, DuPont said soybean sales volumes in North America were higher than expected, but not enough to fully offset the decline in corn volume, especially given the transition under way in the company's soybean lineup to newer, higher-performing products.

The revised outlook also reflected lower-than-expected crop protection herbicide sales, largely due to adverse weather conditions, DuPont explained.

"While 2014 is a transition year in agriculture, the revisions to the outlook we made today do not meet the expectations we set for our Agriculture segment or for the company," DuPont chair and CEO Ellen Kullman said when the results were released. "We have a strong global market position and a rich pipeline, and we will make the necessary changes so that we return to our five-year track record of delivering the reliable, attractive growth our shareholders expect from this segment."

The company also stated that its second-quarter Performance Chemicals results were affected by lower-than-expected selling prices in refrigerants for mobile and stationary applications.

 

Monsanto third-quarter and nine-month sales results, billion $

 

-Third quarter-

-Nine months-

Net sales by segment

2014

2013

2014

2013

Corn seed and traits

1.303

1.559

5.771

5.978

Soybean seed and traits

0.816

0.658

1.903

1.566

Cotton seed and traits

0.401

0.385

0.587

0.630

Vegetable seeds

0.221

0.216

0.597

0.571

All other crops seeds and traits

0.299

0.236

0.506

0.410

Total seeds and genomics

3.040

3.054

9.364

9.155

Agricultural Productivity

1.210

1.194

3.861

3.504

Total net sales

4.250

4.248

13.225

12.659

 

Volume:86 Issue:27

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