Recently, Monsanto Co. (MON) recently reported results for the first quarter of 2010. Net sales slumped 36% year over year to $1,697 million primarily due to lower sales of glyphosate-based herbicides in Brazil and Europe.
 
Monsanto reported a net loss of 3 cents per share, compared to a net profit of $1 per share in first quarter of 2009. The Zacks Consensus Estimate for the reported quarter was pegged at a profit of 1 cent per share.
 
For fiscal 2010, the Zacks Consensus Estimate is $3.26 per share, compared to $3.78 in fiscal 2009. Monsanto expects full-year 2010 EPS in the range of $3.10 to $3.30. The Zacks Consensus Estimate remained unchanged over the past month. However, 2 out of 17 covering analysts lowered their estimates while one analyst raised expectations. The Zacks Consensus Estimate for fiscal 2011 increased 3 cents in the last 30 days as 3 out of 16 analysts have raised their estimates, while 3 have lowered their estimates.
 
With almost an equal number of analysts raising and lowering their estimates, the Zacks Rank for Monsanto remains at #3, or a short-term rating of Hold.
 
Monsanto reaffirmed its previously announced cash flow guidance. It expects free cash flow for fiscal year 2010 to be in the range of $900 million to $1 billion, including an after-tax restructuring charge of $250 million. Monsanto expects net cash provided by operating activities at $2 billion to $2.2 billion, and net cash required by investing activities at $1.1 billion to $1.2 billion for fiscal year 2010.
 
We maintain our long-term recommendation of Neutral for Monsanto as we believe that its healthy balance sheet, along with a robust pipeline of new products and continuous growth in the seeds and genomics segment will drive long-term growth.
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