The Rising Influence of Rising Affluence

[DewDiligence]

MON +2% despite corn, FX headwinds:

http://www.bloomberg.com/news/articles/2015-04-01/monsanto-rises-after-predicting-growth-in-soybean-sales

Monsanto Co., the world’s largest seed company, rose after reporting that plantings of its newest genetically modified soybeans jumped fivefold in 2015 and will double next year.

Planting of Intacta soybeans, developed to control insects in Latin America, will expand to 30 million acres…in 2016. Roundup Ready 2 Xtend soybeans, engineered to withstand the application of two kinds of weedkiller, will debut on more than 3 million acres in the U.S. next year…

The positive news on soybeans outweighed concerns about the impact of a stronger dollar on foreign sales and a smaller corn crop this year. Monsanto cited both of those factors in lowering its full-year earnings outlook to the lower end of a previously announced range.

The old non-GAAP EPS guidance for the fiscal year ending 8/31/15 was $1.75-2.00; the new guidance is “the low end” of this range.

Investors have been well aware of the headwinds from a strong US dollar and low corn prices, so MON’s staying within its prior guidance range for FY2015 is viewed as a sign of strength. (The Strong US dollar will reduce FY2015 non-GAAP EPS by $0.40.) Moreover, MON maintained its long-term guidance to double EPS in FY2019 relative to FY2014.

p.s. About 15 seconds of the CC was spent discussing Roundup safety.

MON’s PR:
http://finance.yahoo.com/news/monsanto-announces-second-quarter-financial-120000678.html

CC slides:
http://www.monsanto.com/investors/Documents/2015/2015.04.01_MON_Q2FY15_Earnings.pdf