Monsanto Forays into Soil Analysis - Analyst Blog


Monsanto Company 's ( MON ) recently-acquired subsidiary, The Climate Corporation entered into an agreement with Solum, Inc. - a privately owned agriculture technology company - to acquire the latter's soil analysis business line. The financial details of the transaction were not announced.

The deal will give Monsanto the right to use the Solum brand, soil testing intellectual property, the soil test lab in Ames, Iowa and Solum's No-Wait Nitrate platform. While the Ames lab provides accurate and reliable mail-in sample services to measure and manage soil fertility, No-Wait Nitrate platform offers real-time measurement of soil nitrate levels from the edge of the field.

The acquisition will help Climate to provide complete farming solutions to its customers, including optimization of crop yields and efficient use of resources. Climate has also offered to retain all the workers associated with Solum soil analysis business line.

Monsanto acquired Climate in November last year. Climate Corporation provides unique software and insurance products to the farmers in order to protect and improve the various farming operations. The acquisition has already been accretive to the company's earnings.

Monsanto reported improved year-over-year results for the first quarter of fiscal 2014. Adjusted earnings per share came in at 67 cents, up from 62 cents earned in the year-ago comparable period. Revenues were $3.1 billion, up 6.9% year over year.

Based on the strong results, the company raised its outlook for fiscal 2014. Earnings per share are expected in the range of $5.00 to $5.20. On an as-reported basis, the company expects to earn $5.02 to $5.22 per share.  

Monsanto currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include The Scotts Miracle-Gro Company ( SMG ), Globe Specialty Metals, Inc. ( GSM ) and International Flavors & Fragrances Inc. ( IFF ). All these stocks carry a Zacks Rank #2 (Buy).

GLOBE SPECIALTY (GSM): Free Stock Analysis Report

INTL F & F (IFF): Free Stock Analysis Report

MONSANTO CO-NEW (MON): Free Stock Analysis Report

SCOTTS MIRCL-GR (SMG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: GSM , IFF , MON , SMG

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