Tags: Monsanto | commodity | profits | MON

Monsanto: Advanced Tech for Commodity Profits

By Tim Plaehn   |   Wednesday, 23 Nov 2011 02:17 PM

Monsanto (MON) provides the seed products for a significant portion of the globe's agricultural production. The company then uses a leadership position in advanced seed technology to generate commodity profits.

Monsanto is an agricultural-supplies development, production and sales company. Corporate focus is on advanced seed products for corn, soybean and cotton farmers, plus herbicide products developed around the company's Roundup brand. Corn seed products generate about 40 percent of revenues. Other seed types and agricultural productivity create about 30 percent of revenues.

The Monsanto 2011 fiscal year closed out on Aug. 31 and the company reported annual revenues of $11.8 billion, up from $10.5 billion in 2010. Net income was $2.96 per share, up 47 percent from $2.01. However in 2009, Monsanto earned $3.78 per share on revenues of $11.7 billion. For 2012, company guidance and Wall Street earnings estimates predict the company will earn $3.45 on revenues of $12.7 billion.

International sales

Of the 15 percent growth in sales and profits Monsanto management is predicting for 2012, 60 percent will come from international sales. Corn and soybean seed sales into Brazil and Argentina are expected to fuel the growth.

Argentine soy farmers are working on an arrangement to buy Monsanto's new insect resistant soybeans in 2012. In Argentina, farmers have traditionally planted the soy crop from beans saved from the previous harvest. This is a big deal for Monsanto, since Argentina is the No. 2 soy-producing country.

Monsanto typically posts a net loss in the fiscal year fourth quarter, breaks even or a small profit in the first quarter, and generates the bulk of earnings in the second and third quarters. Increased sales into South America should drive more profits into the first quarter results.

Analysts from Piper Jaffray recently reiterated their overweight rating on MON and increased the target price by $4 per share. The analysts noted the multi-year growth potential for South American sales.

The company next reports on Jan. 5.

© 2017 Newsmax Finance. All rights reserved.

1Like our page
2Share
Companies
Monsanto (MON) provides the seed products for a significant portion of the globe's agricultural production. The company then uses a leadership position in advanced seed technology to generate commodity profits. Monsanto is an agricultural-supplies development, production...
Monsanto,commodity,profits,MON
324
2011-17-23
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved