Monsanto Earnings Preview: Low Expectations for the Company of the Year

Posted Jan 5th 2010 3:00PM by Trey Thoelcke
Filed under: Earnings Reports, Forecasts

Monsanto Co. (MON), which is the Forbes 2009 company of the year, is scheduled to discuss its financial results for the first quarter of fiscal 2010 in a conference call Wednesday, Jan. 6, at 9:30 AM (ET). You can catch the live webcast of the call on the company's website.

During the three months that ended in November, St. Louis-based Monsanto announced a development collaboration, opened a biotech research center in China, and acquired a research center in Missouri. Analysts surveyed by Thomson Reuters are looking for the world's largest seed producer to report per-share earnings for the quarter between a loss of $0.10 and a profit of $0.11, with a consensus of $0.00. That compares to earnings of $0.98 per share in the same period of last year. Revenue is expected to decline 25.1% from last year to $2.0 billion.

Looking ahead to the second quarter, analysts expect sequential growth in EPS, as well as both sequential and year-over-year revenue growth. Monsanto has topped earnings estimates in the past four quarters, by as much as 39 cents per share.

Monsanto's long-term EPS growth forecast is 15.0%. But its earnings multiple is 25x, and the First Call consensus recommendation shifted from buying to holding MON during the past three months. TheStreet.com sees some potential in the low expectations for Monsanto however.

At $83.50, shares are about 12% higher than six months ago and have been supported by the 200-day moving average since before the holidays.

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Tags: earnings, inthenews, MON, Monsanto