Monsanto Company

Monsanto Company (MON - Analyst Report) is set to announce results for the fiscal third quarter on June 25, prior to market open. Wall Street estimates have been moving up ahead of the report. Four out of 12 covering analysts lifted third-quarter earnings forecasts from last month’s $1.33 per share to $1.35. The most accurate projection is higher at $1.36. The company recently hiked its quarterly dividend from 17.5 cents per share to 24 cents per share. The new dividend is payable on July 25, 2008, to shareowners of record on July 3, 2008.

Company Description

Monsanto is an agricultural company that applies innovation and technology to help farmers around the world produce more while conserving more. The company helps farmers grow yield sustainably so they can be successful, produce healthier foods, better animal feeds and more fiber, while also reducing agriculture's impact on our environment.

Its business is structured in two segments. The Seeds and Traits segment consists of the company's global seeds and traits business, and genetic technology platforms, which include biotechnology, breeding and genomics. The Agricultural Productivity segment consists primarily of crop protection products, residential lawn-and-garden herbicide products, and the company's dairy business. This seed company manufactures the world's best-selling herbicide, Roundup®, and other herbicides used by farmers, consumers and lawn-and-garden professionals.

Recent Events

Monsanto recently announced that it signed an exclusive agreement for a new fungicide seed treatment solution for soybeans in the United States. MON added that the new product contains BASF's top-selling fungicide F 500®, the same active ingredient found in Headline® fungicide with its disease control and plant health benefits. The treatment, which is expected to be commercialized in conjunction with the launch of Monsanto's Roundup Ready 2 Yield™ soybean seed offering, will provide soybean farmers with early-season disease protection, which results in improved stand and extra vitality.

Recent Acquisition

The Zacks Rank #1 (Strong Buy) company also recently stated that it agreed to acquire Marmot, S.A., which operates Semillas Cristiani Burkard (SCB), a privately-held seed company headquartered in Guatemala City, Guatemala. MON explained that, once completed, the acquisition will build on Monsanto's corn business leadership and enable it to offer farmers in Central American countries broader access to corn seed varieties. Monsanto added that the transaction will be completed as soon as practical. Additional terms of the agreement were not disclosed.

Monsanto's executive vice-president of Global Commercial Brett Begemann said, "This acquisition, which solidifies Monsanto's position as the leading corn seed provider in the Latin and Central American regions, will enable our companies to provide new and innovative higher-yielding corn seed offerings to farmers."

Sprouting More Income

The company hiked its quarterly dividend from 17.5 cents per share to 24 cents per share. The new dividend is payable on July 25, 2008, to shareowners of record on July 3, 2008. MON’s dividend yield of 0.5% is better than the industry average as most of the company’s peers offer no dividend.

Fundamental Strength

Monsanto’s earnings per share are expected to grow by 19% over the next 3 – 5 years, which is ahead of the industry average of 15%. The company’s return on equity (ROE) of 21% crushes the industry average of 6%.

Wall Street estimates have been moving up ahead of MON’s quarterly report. Four out of 12 covering analysts lifted third-quarter earnings forecasts from last month’s $1.33 per share to $1.35. The most accurate projection is higher at $1.36.

Results to be Announced Tomorrow

Monsanto Company is scheduled to release results for the fiscal third quarter on June 25, prior to market open.

Read the full analyst report on MON