Monsanto Company (MON) posted strong financial results in the second quarter of fiscal 2012 with an EPS from ongoing business of $2.28 ($2.24 on an as-reported basis), surging much above $1.87 recorded a year ago. The results exceeded the Zacks Consensus Estimate of $2.12.
The company generated revenues of $4,748 million, up from $4,131 million registered in the year-ago quarter. The revenue exceeded the Zacks Consensus Estimate of $4,608 million based on improved sales across segments especially, Seeds and Genomics.
On a segmental basis, revenue from the Seeds and Genomics segment was recorded at $3,924 million, up from $3,421 million in the year-ago quarter. Agricultural Productivity segment’s revenues came in at $824 million versus $710 million a year ago.
During the quarter, gross margin was recorded at approximately 57%, up slightly from 56% recorded in the year-ago comparable quarter.
Operating expense was recorded at $896 up from $823 recorded in the year-ago period.
Selling, general and administrative expenses, as a percentage of net sales were recorded at 11% compared with that of 12%, recorded a year ago. On the other hand, Research & Development (R&D), as a percentage of net sales was reported as 7%, down marginally from 8%, recorded a year ago.
Cash and cash equivalents at the end of 2Q12 were approximately $3,123 million as of February 29, 2012 versus $3,007 million as of November 30, 2011. Long-term debt was recorded at $1,538 million, down marginally from $1,542 million at the end of the previous sequential quarter.
Net cash provided by operating activities was recorded at $1,672 million versus $1,441 million, a year ago.
Free cash flow increased to $1,270 million during the quarter ended February 29, 2012 compared with $917 million reported a year ago.
Outlook
Management raised its full-year ongoing EPS guidance to $3.49 to $3.54 per share from an initial guidance of $3.39 to $3.44. Full-year 2012 EPS guidance, as expected by the company (on an as-reported basis) lies in the range of $3.45 to $3.50.
The company also raised full-year free cash flow guidance to $1.6 to $1.8 billion from an initial the range of $1.3 billion to $1.5 billion.
The net cash provided by operating activities is expected to be $2.5 billion to $2.8 billion up from an initial expectation of $2.2 billion to $2.5 billion. Management retains net cash required by investing activities amounting to $900 million to $1 billion for fiscal year 2012.
Monsanto’s biotechnology research and innovations position it as a market leader above its peers, such as Syngenta AG (SYT) and The Dow Chemical Company (DOW).
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