Monsanto sales flat in Q3 FY 2014

Monsanto’s sales were essentially flat at $4,250 million in the third quarter of FY 2014 ended May 31st 2014. The sales of agrochemicals rose by 1.3% to $1,210 million. Net income for the quarter fell by 5.6% to $858 million. Earnings before interest & taxes (EBIT) for this quarter increased by 0.6% to $1,211 million.

For the first nine months of FY2014, the total sales increased by 4.5% to $13,225 million. With a 10.2% increase, agrochemicals sales reached $3,861 million. The EBIT rose by $8.9% to 4,128 million, while the net income achieved a 6.0% increase to $2,896 million.

Sales in the Seeds and Genomics segment, including the global seeds and related traits business, biotechnology platforms and precision agriculture, fell by 0.5% to $3,040 million for the third quarter. For the nine months, sales for the segment were up by 2.3% to $9,364 million.

Operating expenses were up $58 million in the third quarter compared to the prior year due in part to additional costs as the company invests in its precision agriculture and biological platforms. In the three month comparison, selling, general and administrative (SG&A) expenses remained flat as a percentage of sales. Quarterly research and development (R&D) expenses were up $35 million over the prior year period.

Outlook

Monsanto still holds that the Seeds and Genomics segment remains an integral part of long-term growth targets, expected to drive a majority of the targeted five-year growth by contributing more than $4 billion in total incremental gross profit in that period. That outlook reflects several key platform opportunities from the fiscal year 2014 performance, including:

The company remains on track for the fastest ever ramp up of a soybean trait. With an early view on supply, Monsanto expects Intacta RR PRO® soybean acreage in Latin America to increase by three-to-four times over the launch volume, reaching 10 to 12 million acres in fiscal year 2015.

The company's global corn portfolio continues to be one of the company's most important ongoing drivers, including gross profit growth and margin expansion in the full year outlook despite lower planted corn acres and global currency headwinds in fiscal 2014.

The company also continues to make strong progress across its new Climate Corporation platform. The company's suite of offerings has been stronger than originally projected, with more than 40 million installed acres of the Climate BasicTM tool and more than a million acres of premium services like Climate PROTM and FieldScripts® expected.