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Monsanto (MON) to Report Q2 Earnings: What's in the Cards?
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Monsanto Company is slated to report second-quarter 2018 fiscal (ended February 2018) results on Apr 5, before the market opens.
The company pulled off an impressive average positive earnings surprise of 46.76% over the preceding four quarters. In first-quarter fiscal 2018, its adjusted earnings of 41 cents per share outpaced the Zacks Consensus Estimate of 38 cents.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Increased market penetration of INTACTA RR2 PRO and Roundup Ready 2 Xtend soybeans, and stronger corn and cotton businesses will likely bolster top-line results of Monsanto’s Seeds and Genomics segment. Moreover, wider reach of the Climate FieldView platform will prove to be a major top-line driver in the quarters ahead.
Monsanto believes improved glyphosate pricing, elevated volumes of XtendiMax herbicide and benefits secured from the state-of-the-art VaporGrip technology will bolster the company’s Agricultural Productivity segmental revenues. The Zacks Consensus Estimate for the segment's fiscal second-quarter revenues is currently pegged at $964 million, higher than $888 million recorded in the preceding quarter.
Furthermore, sturdier sales, ongoing restructuring moves and diligent cost-saving initiatives are expected to boost Monsanto’s near-term profitability.
The Zacks Consensus Estimate for the fiscal second-quarter gross profit for the company’s Agriculture Productivity and Seeds and Genomics segments are currently pegged at $235 million and $2,891 million, respectively, higher than $180 million and $1,132 million recorded in the prior quarter.
However, in the last 60 days, the Zacks Consensus Estimate for the stock has moved south 0.5% to $5.73 per share for fiscal 2018 (ending August 2018), reflecting bearish market sentiments.
We fear that stiff rivalry in the global seeds, traits and agricultural chemical industry might curb Monsanto’s growth.
Also, the company’s cost and sales remain highly sensitive to commodity price fluctuations. Dismal agricultural products’ prices might weigh on the company’s revenues and margins.
In addition, growth opportunities of the company might be limited if Bayer AG’s (BAYRY - Free Report) buyout deal is blocked by regulatory authorities (anticipated to be closed by second-quarter fiscal 2018).
Earnings Whispers
Our proven model does not conclusively show that Monsanto will likely beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.
That is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Monsanto currently has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at $3.38.
Zacks Rank: Monsanto carries a Zacks Rank #3. Though a Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are two stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
CF Industries Holdings, Inc. (CF - Free Report) with an Earnings ESP of +14.50% and a Zacks Rank #1.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
Monsanto (MON) to Report Q2 Earnings: What's in the Cards?
Monsanto Company is slated to report second-quarter 2018 fiscal (ended February 2018) results on Apr 5, before the market opens.
The company pulled off an impressive average positive earnings surprise of 46.76% over the preceding four quarters. In first-quarter fiscal 2018, its adjusted earnings of 41 cents per share outpaced the Zacks Consensus Estimate of 38 cents.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Increased market penetration of INTACTA RR2 PRO and Roundup Ready 2 Xtend soybeans, and stronger corn and cotton businesses will likely bolster top-line results of Monsanto’s Seeds and Genomics segment. Moreover, wider reach of the Climate FieldView platform will prove to be a major top-line driver in the quarters ahead.
Monsanto believes improved glyphosate pricing, elevated volumes of XtendiMax herbicide and benefits secured from the state-of-the-art VaporGrip technology will bolster the company’s Agricultural Productivity segmental revenues. The Zacks Consensus Estimate for the segment's fiscal second-quarter revenues is currently pegged at $964 million, higher than $888 million recorded in the preceding quarter.
Furthermore, sturdier sales, ongoing restructuring moves and diligent cost-saving initiatives are expected to boost Monsanto’s near-term profitability.
The Zacks Consensus Estimate for the fiscal second-quarter gross profit for the company’s Agriculture Productivity and Seeds and Genomics segments are currently pegged at $235 million and $2,891 million, respectively, higher than $180 million and $1,132 million recorded in the prior quarter.
However, in the last 60 days, the Zacks Consensus Estimate for the stock has moved south 0.5% to $5.73 per share for fiscal 2018 (ending August 2018), reflecting bearish market sentiments.
We fear that stiff rivalry in the global seeds, traits and agricultural chemical industry might curb Monsanto’s growth.
Also, the company’s cost and sales remain highly sensitive to commodity price fluctuations. Dismal agricultural products’ prices might weigh on the company’s revenues and margins.
In addition, growth opportunities of the company might be limited if Bayer AG’s (BAYRY - Free Report) buyout deal is blocked by regulatory authorities (anticipated to be closed by second-quarter fiscal 2018).
Earnings Whispers
Our proven model does not conclusively show that Monsanto will likely beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.
That is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Monsanto currently has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at $3.38.
Monsanto Company Price and EPS Surprise
Monsanto Company price-eps-surprise | Monsanto Company Quote
Zacks Rank: Monsanto carries a Zacks Rank #3. Though a Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are two stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
The Chemours Company (CC - Free Report) with an Earnings ESP of +2.72% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries Holdings, Inc. (CF - Free Report) with an Earnings ESP of +14.50% and a Zacks Rank #1.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>