Monsanto continues return to growth in fiscal Year 2017

Monsanto updated its fiscal year 2017 as-reported EPS guidance to be at the high end of the range of $3.95 to $4.44.

monsanto fiscal Year 2017Monsanto delivers fiscal Year 2017 second quarter as-reported EPS of $3.09 and ongoing EPS of $3.19. Full year 2017 EPS guidance now expected to be at high end of the range of $3.95 to $4.44 on an as-reported basis and $4.50 to $4.90 on an ongoing basis.

The company’s performance was driven in part by strong gross profit growth from its corn and soybean businesses, the absence of the Argentine peso devaluation and benefit from the sale of its Latitude® wheat fungicide business. In reporting earnings results, executives reinforce confidence about the cumulative strength of the business, updating full-year guidance to the high end of the range for both as-reported and ongoing EPS. Monsanto also highlights progress in its merger with Bayer as both parties continue to work toward completion of the transaction by the end of calendar year 2017.

Fiscal Year 2017 Outlook

Monsanto updated its fiscal year 2017 as-reported EPS guidance to be at the high end of the range of $3.95 to $4.44. On an ongoing basis, fiscal year 2017 ongoing EPS is also expected to be at the high end of the range of $4.50 to $4.90. This reflects the company’s increased confidence in the growth expected for the year and assumes the change in currency rates will have a relatively neutral effect on a full-year basis.

From a gross profit perspective, the company continues to expect the Seed and Genomics segment gross profit to increase mid-single digits as a percent year-over-year. Within its Ag Productivity segment, gross profit is still expected to be in the range of $850 to $950 million, though now at the lower end of the range.

For third quarter, the company expects as-reported earnings per share to be roughly flat due to the absence of Argentine-related tax matters call-out of $0.50 per share, mostly offset by the expected decline in ongoing earnings per share, from the absence of the alfalfa deal, which equaled roughly $0.34 cents of earnings last year, and the volume timing shift from third quarter to second quarter in the Europe and U.S. corn businesses.

For the full year, the company now anticipates these earnings to translate to the high end of the range of $1.2 billion to $1.6 billion of free cash flow, reflecting operating cash flow at the high end of the range of $2.4 billion to $2.8 billion and capital expenditures of $1.2 billion for fiscal year 2017.