) posted strong financial results in the third quarter of
fiscal 2012, with earnings per share from ongoing business of $1.63
surging much above $1.28 recorded a year ago. The results exceeded
the Zacks Consensus Estimate of $1.59.
The company generated revenues of $4,219 million, up from $3,608
million registered in the year-ago quarter based on volume and a
mix benefit across segments.The revenue exceeded the Zacks
Consensus Estimate of $3,977 million.
On a segmental basis, revenue from the Seeds and Genomics
segment was recorded at $3,128 million, up from $2,647 million in
the year-ago quarter. Agricultural Productivity segment's revenues
came in at $1,091 million versus $961 million a year ago.
During the quarter, gross margin was recorded at approximately
56%, up slightly from 55% recorded in the year-ago comparable
Operating expense was recorded at $1,013, up from $952 recorded
in the year-ago period.
Selling, general and administrative expenses, as a percentage of
net sales, were recorded at 15% compared with 16% recorded a year
ago. On the other hand, Research & Development (R&D), as a
percentage of net sales, was 9%, down marginally from 10% recorded
a year ago.
At the end of third quarter, cash and cash equivalents were
approximately $1,716 million versus $1,074 million a year
ago. Long-term debt was recorded at $1,538 million, down
marginally from $1,543 million at the period ended August 31,
Net cash provided by operating activities was recorded at $853
million for nine months ended May 31, 2012 versus $944 million
recorded a year ago.
Exiting the quarter ended May 31, 2012, free cash flow increased
to $311 million compared with $237 million a year ago.
Management confirmed its full-year ongoing earnings per share
guidance in the range of $3.65 to $3.70 per share on an ongoing
basis. Also, the company expects 2012 earnings per share on an
as-reported basis to be $3.73 to $3.78.
The company reaffirmed full-year free cash flow guidance in the
range of $1.7 billion to $1.8 billion.
The net cash provided by operating activities is expected to be
in the range of $2.7 billion to $2.9 billion. Management
retains net cash required by investing activities in the range of
$1 billion to $1.1 billion for fiscal year 2012.
Monsanto's biotechnology research and innovations position it as
a market leader above its peers, such as
The Dow Chemical Company
We currently maintain a long-term Neutral recommendation on the
stock. Monsanto has a Zacks #2 Rank, which translates into a
short-term Buy rating (1-3 months).
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