January 9, 2013

 

Monsanto delivers strong results for Q1 2013

 

 

For the first quarter of its fiscal year 2013, Monsanto delivered strong results, reflecting contributions from the continued expansion of its Latin American corn business, early momentum in its US seeds and traits business and performance of its agricultural productivity segment.

 

Executives said the cumulative strength of the company's broad business portfolio translated to an increase in full-year earnings per share and free cash flow guidance, even at this early point in the company's fiscal year. Monsanto also highlighted 18 phase advancements across its integrated yield pipeline, a record for its annual research and development update.

 

"We've achieved a successful start to the year, with contributions from multiple areas that speaks to the strength of our global business and provides confidence in our ability to realise a third consecutive year of significant growth," said Hugh Grant, chairman and chief executive officer for Monsanto. 

 

The company achieved strong first quarter results that reflect the strength and growth of its business. Net sales for the quarter increased 21% over the prior year's first quarter to US$2.9 billion, with significant contribution from the corn seed and traits business, led by the corn opportunity acceleration in Latin America and strong shipments in the US reflective of a positive order book. Gross profit for the 2013 first quarter increased 27% over the prior year period to US$1.4 billion.  

 

The company's first quarter earnings per share (EPS) were US$0.62 on an on-going and US$0.63 on an as-reported basis. The company raised its full year on-going EPS guidance to US$4.30 to US$4.40 per share, positioning the company for a third straight year of strong on-going earnings growth.

 

The company also raised full year free cash flow guidance to US$1.8 billion to US$2 billion. The company expects net cash provided by operating activities to be US$2.9 billion to US$3.3 billion, and net cash required by investing activities to be US$1.1 billion to US$1.3 billion for fiscal year 2013.

 

Sales for Monsanto's Seeds and Genomics segment increased 14% in the first quarter to US$1.8 billion, with corn seed and traits performance driving the first quarter strength. Corn seed and traits net sales increased 27% over last year's first quarter to US$1.1 billion, driven in part by the business strength in Brazil, Argentina and Mexico. The trait upgrade and expansion is on track in both Brazil and Argentina where the company is achieving strong demand for its corn products.

 

Complementing the corn performance in Latin America is the early momentum in the US seeds and traits business. Backed by strong cash flow and customer prepayments, the company noted a positive US order book, with the order pace ahead of the same point in time last year. With two years of strong performance, company executives said the US business is in position to grow again in 2013.

 

Net sales in the first quarter of fiscal 2013 for Monsanto's Agricultural Productivity segment increased US$279 million, reflecting the benefit of a favourable marketplace environment lifting the business in the near-term. The company indicated it remains focused on its established strategy for Roundup^® following the reset of that business in 2010.