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Monsanto: decade of the soybean adds 4 billion
Sep. 3, 2014
Monsanto Company wants to make this the “decade of the soybean.” And if it succeeds, the agrichemical and biotech company thinks it can reap a windfall of $4 billion in the next five years.
Monsanto has its eyes on what it sees as 100 million acres of potential soybean acreage throughout the world. With its latest Roundup Ready products and the high prices soybeans have been fetching on the market in recent years, Monsanto hopes it can persuade farmers to switch from corn and cotton to soybeans.
This year, farmers planted 84.8 million acres in soybeans, up from 76.5 million in 2013, according to the USDA’s National Agricultural Statistics Service. Corn took up 91.6 million acres this year, a decline from last year’s total of 95.4 million.
If more farmers do switch to soy, Monsanto said its investors could expect an extra $0.02 per share for every 1 million acres that shifts to the crop. Ultimately Monsanto is looking to double its earnings-per-share and increase its gross profits by $4 billion by 2019. In 2013, Monsanto grossed $7.65 billion in profit.
Monsanto’s third-quarter earnings per share this year were $1.62, down from $1.66 in 2013. Total net sales were flat at $4.25 billion in the third quarter compared with last year. For the year, the company expects its diluted EPS to come out at $5.10 to $5.20.
To help meet its long-term goals, Monsanto has created an incentive plan for its full-time and part-time employees. According to filings with the Securities and Exchange Commission, the incentives are tied to performance goals, namely diluted EPS, free cash flow and net sales. The largest share of the payout is allocated based on Monsanto’s EPS goals.
Monsanto’s board of directors’ compensation committee has discretion and final authority in paying the performance bonuses.
Source: Bizjournals.com
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