Shares of Monsanto (NYSE:MON) are trading down today even though they met expectations for the quarter. Some appear to believe by not having a blowout quarter the company's guidance will be somewhat weaker as the year goes on.
For the quarter Monsanto generated a profit of $1.02 billion, or $1.88 a share, up from $887 million, or $1.60 a share, last year in the same quarter, a gain of 15 percent. Net sales jumped 6.1% to $4.13 billion.
Concerns were somewhat allayed over the performance of SmartStax, its high-end biotech corn seed, which struggled last year because of high prices and a weaker economy at the time. Rival DuPont (NYSE:DD) was able to gain some share by offering a lower price alternative with less traits, which some farmers gravitated to.
Monsanto said now sales are on track to meet the goal of having the seed planted in "mid-teens" millions of acres in the U.S. Soybean sales are also said to be on track to meeting company goals.
Farmers also have more money this year, reducing their resistance to price, and Monsanto was able to increase gross margins from 54 percent to 55.9 percent as a result.
Hugh Grant, chairman and chief executive of Monsanto, said in a statement, "We have the right pieces and the right execution to feel very good that mid-teens earnings growth in 2011 is on track."
Monsanto boosted its full-year free cash flow guidance for the fiscal year to $900 million to $1.1 billion from $800 million to $900 million.
Monsanto was trading at $70.24, falling $3.08, or 4.20 percent, as of 11:52 AM EDT.
Wednesday, April 6, 2011
Monsanto (MON) Down Even After Meeting Expectations
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