On Apr 15, 2014, we issued an updated research report on
). The company reported improved year-over-year results for the
second quarter of fiscal 2014 (ended Feb 28, 2014). Earnings per
share increased roughly 15% to $3.15, while revenues rose roughly
6.6% to $5.8 billion.
The hike in results was primarily a result of year-over-year
improvements in the corn and soybean demand in various regions.
The company has also been launching products to gain a
significant market share. In fiscal 2014, the company unveiled
the Intacta technology, which is expected to facilitate soybean
growth over the coming years.
Monsanto's efforts to curb costs have also been noteworthy in
the recent past. In the reported quarter, the company expanded
gross profit margin by 12% year over year. Additionally, corn
margins were up 2.5% year over year, which is expected to
increase 3% toward the end of the fiscal year.Moreover, soybean
margins increased 7% year over year, targeted at a range of 6-8%
for fiscal 2014.
However, overseas operations of the company expose it to
foreign currency fluctuations, thereby impacting its earnings. In
fiscal 2014, earnings per share are expected to be affected by
roughly 15 to 20 cents due to negative impacts from foreign
Moreover, Monsanto's research and development involves huge
investments and governmental permits. Massive time and expenses
toward such innovative herbicide products and biotechnology
traits make them high priced exposing the company to major price
competition from local generic companies.
With a market capitalization of roughly $58 billion, Monsanto
currently holds a Zacks Rank #4 (Sell). Some better-ranked stocks
in the industry include
The Andersons, Inc.
Gruma S.A.B. de CV
CVR Partners, LP
). All these stocks carry a Zacks Rank #2 (Buy).
ANDERSONS INC (ANDE): Free Stock Analysis
GRUMA SA-ADR B (GMK): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
CVR PARTNERS LP (UAN): Free Stock Analysis
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