Replies to post #112112 on Biotech Values

[DewDiligence]

Webcast slides for MON’s pipeline update (42 slides):

http://www.monsanto.com/SiteCollectionDocuments/Q1-2011-pipeline-update.pdf

[DewDiligence]

MON Reports FY1Q11 Results

[The fiscal first quarter, which ends Nov 30, is typically close to breakeven because most of the sales are in the southern hemisphere. Thus, MON’s FY1Q11 EPS of $0.02 was considered a good result, and the share price rose 4% since this report was issued Thursday morning. MON maintained its non-GAAP EPS guidance of $2.72-2.82 for the fiscal year ending 8/31/11. (Terminology note: MON refers to non-GAAP EPS as “ongoing” and to GAAP EPS as “as-reported.”)

As an example of how inefficient the market is, MON shares have risen a whopping 61% in the past six months even though there has been no news of great consequence during this period.

The FY1Q11 results in this PR were released concurrently with the annual pipeline update (see #msg-58519196 and #msg-58525239). Financial slides from the CC are at: http://www.monsanto.com/SiteCollectionDocuments/Q1-2011-financial-presentation.pdf .

In my opinion, MON is one of the premiere beneficiaries of The Global Demographic Tailwind and it deserves to be a core holding in any biotech portfolio.]

http://finance.yahoo.com/news/Reflecting-Strong-prnews-630855821.html?x=0&.v=1

›Reflecting Strong Seeds-and-Traits Performance, Monsanto Q1 on Track as Company Confirms Full-Year Ongoing EPS and Free Cash Flow Guidance

January 6, 2011, 8:00 am EST

ST. LOUIS, Jan. 6, 2011 /PRNewswire-FirstCall/ -- Monsanto Company (NYSE:MON) reported earnings per share growth and significant free cash generation for the first quarter of 2011, which ended Nov. 30, 2010, and today announced nine phase advances as part of its annual research and development pipeline update. The company also reaffirmed its mid-teens earnings growth and free cash flow guidance for fiscal year 2011.



"Our first quarter tracked well with our operating plan across the crops, geographies and products we expect to be drivers in 2011," said Hugh Grant, chairman, president and chief executive officer for Monsanto. "We're executing against the areas most important to our business growth, particularly our seeds-and-traits focus in Latin America and delivering on our seed strategy in the United States. Our early U.S. order books show farmers are interested in our newest products, Genuity® Roundup Ready 2 Yield® soybeans and the reduced-refuge corn family anchored by Genuity® SmartStax®. And our R&D pipeline remains strong, leaving the company well-positioned for long-term growth."

Results of Operations

Net sales increased 8 percent in the quarter to $1.8 billion, with increases across all major crops in the seeds and genomics segment. Gross profit for the total company increased 11 percent, and gross profit as a percent of sales improved one percentage point to 45 percent, driven by increases in seeds and traits revenue across all major crops – particularly corn and soybeans in Latin America and cotton in Australia.

Selling, general and administrative (SG&A) expenses decreased 9 percent for the quarter due largely to the company's restructuring actions in the prior year. R&D expenses increased 13 percent as the company manages more projects in advanced pipeline phases.

The company's first quarter earnings per share (EPS) was $0.02 on an ongoing basis ($0.01 on an as-reported basis).

Cash Flow

The first quarter of fiscal 2011 was a significant source of cash. Free cash flow was $500 million in the quarter compared with a use of cash of $1.6 billion for the same period last year. This is primarily the result of a timing shift from last year's second quarter into this year's first quarter, as the later harvest in 2009 delayed prepayments in fiscal 2010.

Net cash provided by operating activities was $624 million, compared to a use of $1.4 billion in the first quarter last year. Net cash required by investing activities for the first quarter of fiscal 2011 was $124 million, compared with a use of $197 million for the year-ago quarter. Net cash required by financing activities was $340 million, compared to net cash provided of $102 million for the prior year's first quarter. The company spent $267 million in the first quarter on share repurchases, crossing a quarter of the current $1 billion, three-year authorization.

Outlook

The company affirmed its guidance of free cash flow for fiscal year 2011 in the range of $800 million to $900 million, reflecting an investment of $600 to $700 million in capital expenditures. The company expects net cash provided by operating activities to be $1.7 billion to $1.9 billion, and net cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2011.

The company confirmed full-year 2011 ongoing [i.e. non-GAAP] earnings per share (EPS) guidance is in the range of $2.72 to $2.82. Full-year 2011 EPS guidance on an as-reported basis [GAAP] is in the range of $2.69 to $2.79.

Seeds and Genomics Segment



The Seeds and Genomics segment consists of the company's global seeds and related traits business.

Sales for Monsanto's Seeds and Genomics segment increased 13 percent in the first quarter, reflecting increases across the corn, soybean, cotton and vegetable platforms.

Corn seed and traits net sales increased 8 percent over last year's quarter. The primary driver was the company's Latin America seed business, with increased acres in Argentina and the mix benefit from increased overall trait penetration in Brazil. The company also gained a year-over-year volume increase in the United States as the U.S. order book tracks well with the company's product strategy and acreage targets.

Volume increases brought soybean seeds and trait sales up 12 percent compared to last year, and cotton sales saw growth led by an increase in planted acres in Australia. Vegetable sales were up 6 percent or $10 million.

Agricultural Productivity Segment



The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products.

Sales in the first quarter of fiscal 2011 for Monsanto's Agricultural Productivity segment remained flat, with sales of Roundup and other glyphosate-based herbicides tracking well with expectations following last year's strategic repositioning. Sales of Roundup and other glyphosate-based herbicides increased 3 percent, reflecting the early Latin American sales-and-application season, leading an increase in volume offset by the lower net selling price.

Webcast Information

In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30 a.m. eastern time) today. The call will focus on these results, future expectations and an update of projects within the company's R&D pipeline, including the nine phase advancements. The call also may include a discussion of Monsanto's strategic initiatives, product performance and other matters related to the company's business.‹

[DewDiligence]

MON Issues 2012 Pipeline Update

[12 programs advanced during the past year: 3 programs from phase-1 to phase-2; 7 programs from phase-2 to phase-3; and 2 programs from phase-3 to phase-4 (the final phase before full-fledged commercialization). CC slides on the pipeline (42 pages) are at
http://www.monsanto.com/investors/Documents/2012/FINAL-Q112%20RD%20Slides%2001-05-12.pdf ; a video on MON’s pipeline is at www.monsanto.com/pipeline .

See #msg-58519196 for last year’s pipeline update. A separate PR on MON’s concurrently reported FY1Q12 financial results is at #msg-70653530.]

http://finance.yahoo.com/news/Monsanto-Research-Engine-prnews-3245532603.html?x=0

›Monsanto's Research Engine Delivers Record Progress Across Multiple Platforms
Innovations in Expanding Pipeline Offer Strong Yield Opportunities for Farmers

ST. LOUIS , Jan. 5, 2012 /PRNewswire/ -- A diverse group of projects across research and development (R&D) platforms aimed at making agriculture more productive and profitable for farmers, and more sustainable, were highlighted during Monsanto Company's (NYSE: MON) annual pipeline update.

Using a combination of the latest breeding, biotechnology, and agronomic tools and solutions, Monsanto remains committed to developing and delivering products that can create the next wave of yield opportunity for farmers.

"We're excited about the record progress we've made this year across all of our R&D platforms, as the projects in our pipeline today will help us provide an even stronger toolkit of solutions to meet the needs of farmers in the future," said Robb Fraley , Monsanto chief technology officer. "Through the convergence of innovations in our breeding, biotechnology and agronomic solutions platforms, we're focused on providing farmers the total package that can maximize their yields sustainably."

Breeding Platform

Monsanto draws from a collection of germplasm that is unparalleled in the industry. Increasingly, the company is using tools like molecular markers to more efficiently and effectively mine the diversity in this genetic library to develop elite seeds faster than ever before. In addition to annual germplasm improvements, three targeted breeding traits advanced phases this year, Phytophthora Resistant Peppers, Downy Mildew-Resistant Cucumbers and Beneforte® Broccoli.

Biotechnology Platform

Monsanto also highlighted a number of projects in both its agronomic traits pipeline and its yield and stress collaboration with BASF Plant Science. Yield and stress projects advancing phases this year are Drought-Tolerant Cotton and Higher-Yielding Corn. Six advancements designed to provide improved pest and weed management solutions were announced in the agronomic traits pipeline. Highlights include Corn Rootworm III and Second-Generation Insect-Protected Genuity® Roundup Ready 2 Yield® soybeans, which would both offer multiple modes of action for enhanced insect control and durability. Monsanto's Cotton Lygus Control project, the first to target piercing-sucking insects in cotton, also advanced phases.

Agronomic Solutions Platform

Monsanto spotlighted three advancements in its agronomic solutions platform, including a new premix formulation of Roundup® and low volatility dicamba that would provide farmers with an additional tool for weed management and a novel nematicide chemistry designed to improve plant health. The company's Integrated Farming Systems I project, which would tie hybrid recommendations to variable-rate planting to help drive yields further, advanced to the final phase before commercialization.


The following is a complete list of projects advancing phases in 2012.


Biotechnology Agronomic Traits

Corn Rootworm III (Advanced to Phase 3)
Corn Rootworm III would offer increased control and durability against the corn rootworm by providing two distinct modes of action. The project incorporates RNAi technology as its second mode of action. RNAi is a natural process that occurs in cells to help protect their health.

Second-Generation Insect-Protected Genuity® Roundup Ready 2 Yield® Soybeans (Advanced to Phase 3)
Second-Generation Insect-Protected Genuity® Roundup Ready 2 Yield® soybeans would offer multiple modes of action for improved durability, a wider spectrum of insect protection, including armyworms, and the opportunity to reduce the size of the structured refuge, thereby enabling greater yield potential and value to the grower.

Genuity® Bollgard® III Cotton (Advanced to Phase 3)
Genuity® Bollgard® III cotton is a third-generation insect control product that would build on the success of previous Bollgard® products by providing enhanced insect protection, including improved control of beet and fall armyworms, through the use of multiple modes of action. The product would also provide enhanced, season-long protection to targeted insects.

Cotton Lygus Control (Advanced to Phase 2)
The Cotton Lygus Control product would be the first to extend the spectrum of insect control to piercing-sucking lygus bugs, which damage bolls and reduce lint yield and quality.

Next-Generation Genuity® Roundup Ready® Canola (Advanced to Phase 4)
Next-Generation Genuity® Roundup Ready® canola is a second-generation weed control product that would offer farmers greater flexibility through an extended application window up to the first flower and opportunity to apply Roundup® herbicide at higher rates for enhanced weed control.

Next-Generation Genuity® Roundup Ready® + LibertyLink® Canola (Advanced to Phase 3)
Next-Generation Genuity® Roundup Ready® + LibertyLink® canola would deliver a second mode of action of herbicide tolerance, offering flexibility to have multiple herbicide choices for farmers planting the DEKALB® brand.


Biotechnology Yield & Stress Traits

Higher-Yielding Corn (Advanced to Phase 3) – In Collaboration with BASF
The higher-yielding corn trait is designed to be stacked on top of Genuity® corn products and other corn pipeline traits to provide additional yield opportunity. This additional yield opportunity would be additive to the total system offered to farmers, creating a package with the highest yield potential.

Drought-Tolerant Cotton (Advanced to Phase 2) – In Collaboration with BASF
The drought-tolerant cotton trait is designed to deliver improved water use in cotton by providing yield stability in environments experiencing occasional or consistent water stress. The trait also has the potential to reduce water needs on irrigated acres. This is the first generation project in a family of drought-tolerant traits for cotton.


Breeding Traits

Phytophthora-Resistant Peppers (Advanced to Phase 3)
Field evaluations are demonstrating significant increase in Phytophthora blight resistance. Elite commercial pepper hybrids with high resistance to Phytophthora blight would enable farmers to increase productivity, simplify management and potentially reduce fungicide applications.

Downy Mildew-Resistant Cucumbers (Launching)
New downy mildew-resistant lines have shown potential for a distinct yield advantage while greatly reducing both the number and cost associated with the fungicidal sprays growers currently use to control the disease.

Beneforte® Broccoli (Launching)
Beneforte® naturally contains two to three times the phytonutrient glucoraphanin compared with other leading broccoli varieties produced under similar growing conditions, boosting the body's antioxidant enzyme levels at least two times more than other broccoli.


Chemistry and Agronomic Systems

Dicamba+Roundup® Premix Formulation (Advanced to Phase 3)
Monsanto collaborates with BASF's Crop Protection division to develop improved dicamba formulations. The dicamba+Roundup® premix formulation has advanced to phase three, with expanded field trials to begin in 2012 pending EPA approval. Dicamba is an economical and effective herbicide that provides excellent control for a wide range of broadleaf weeds.

Nematicide Chemistry (Advanced to Phase 2)
Monsanto's new nematicide chemistry would provide farmers with an additional tool to control pressure against multiple nematode species, one of the largest unsolved pest problems in agriculture.

Integrated Farming Systems I (Advanced to Phase 4)
Monsanto's Integrated Farming Systems on-farm systems recommendations would unlock proven yield benefits and help farmers recognize maximum potential economic yield from their crops. Recommendations would be delivered through tools that complement and integrate with other precision agriculture technology to help farmers easily manage Monsanto's products and recommendations across their operations. The Integrated Farming Systems I project, which would tie hybrid recommendations to soil and environment based yield potential enabling variable-rate planting to help drive potential yields further, advanced to the final phase before commercialization.‹