) reported strong results for fiscal second quarter 2013 with
earnings of $2.73 per share, beating the Zacks Consensus Estimate
of $2.55 by 7.1%. Earnings of this company, a leading provider of
agricultural products also grew 19.7% year over year, driven by
solid top line growth.
Following the solid second quarter results, Monsanto raised
its earnings guidance for fiscal 2013.
Monsanto generated revenues of $5.5 billion in the fiscal second
quarter, an increase of 15.2%, driven by an improvement in its
global corn business. The revenues also surpassed the Zacks
Consensus Estimate of $5.3 billion by 2.8%.
On a segmental basis, revenue from the
Seeds and Genomics
segment increased 10.8% in the quarter to $4.3 billion, driven by
an increase in corn seeds and traits net demand in Brazil and
improving trends in the U.S seeds business.
Revenue from the
segment increased 36.7% in the quarter to $1.1 billion, driven by
recovery in market environment.
During the quarter, gross margin was recorded at approximately
56.1%, indicating an increase of 90 basis points, from 57.0%
registered in the year-ago comparable quarter.
Operating expenses were recorded at $958 million, up from $896
million recorded in the year-ago period.
Selling, general and administrative expenses and Research &
Development, as a percentage of net sales, were in line with the
year-ago quarter at 11.0% and 7.0%, respectively.
Exiting the fiscal second quarter, the company's cash and cash
equivalents stood at approximately $4.4 billion versus $4.6
billion at the end of fiscal first quarter 2013. Long-term debt
was recorded at $2.0 billion, down from $2.1 billion at the end
of the previous quarter.
Management increased its guidance for ongoing earnings per share
in fiscal 2013 to be within a range of $4.40-$4.50 from the
previously announced range of $4.30-$4.40 per share. Monsanto has
maintained its free cash flow guidance to be within the range of
The net cash provided by operating activities is expected to
be in the range of $2.9-$3.3 billion while net cash required by
investing activities is likely to be in the range of $1.1-$1.3
Monsanto currently carries a Zacks Rank #2 (Buy). Other stocks
worth a look in the chemicals industry are
CVR Partners LP
); both carrying a Zacks Rank #1 (Strong Buy), whereas,
Eastman Chemical Co.
) carries a Zacks Rank #2 (Buy).
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