Mosanto Conference Call Highlights

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Not simply a seed company Shares of Mosanto
MON
closed Wednesday up 4.91 percent following its third quarter earnings release. Below are some highlights and key takeaways from its conference call: Guidance and Growth: • We've raised our outlook to the upper end of our original guidance range for ongoing EPS and free cash flow. • We see a unique combination of core growth, new platforms and the opportunity to better leverage our capital structure. • We're providing multiple solutions to farmers by delivering improved yield technology in the seed, in the bag and in the field. • We're willing to back our confidence in long-term growth with a new target to at least double our ongoing EPS over the next five years. • We haven't laid out multiyear targets for the past several years. • Doing so today is evidence of the confidence that we have in our core business and the transformational potential in our growth platforms. • We believe we've positioned ourselves to sustain the mid-teens plus EPS growth that's been our hallmark through a full decade. • Ability to target continued growth at that level off our revenue base in the range of $15 billion. • Our plan to return an additional $10 billion to our shareowners over the next two years which is another important expression of our confidence in Monsanto's long-term growth. • We're now targeting a net debt to EBITDA leverage ratio of 1.5 by the end of fiscal year 2015. • One of our first capital allocation priorities will be a new two-year $10 billion share buyback program with an expected accelerated share repurchase of approximately $6 billion in the near term. • We've roughly $0.15-$0.20 EPS impact from currency headwinds. • Q3 came in somewhat better than we projected during our Q2 call, with ongoing EPS of $1.62. • Our Board just approved the new two-year $10 billion buyback program. • We'll use it in combination with our approximately $1 billion that remains in our current program. Global: • Despite continued softening across the macro environment, we expect corn to be a source of full-year growth and part of the Seeds & Traits rebound. • Corn acres have come down in the Americas by about 5% • Currency reflects an incremental headwind to our business of roughly another 3%. • Factors have tempered some of the upside growth this year, along with continued volatility in the Ukraine and some incremental effects of Latin America. • There was widespread rain and flooding in Argentina that has significantly reduced our production yields • Brazil, our largest competitor has acknowledged it had some challenges with insect resistance to its key traits, making some late pricing adjustments across the market. • Notably, Intacta in Latin America and the overall Roundup Ready 2 Yield platforms in the U.S. • And in vegetables, we're now tracking with the turnaround in revenue and gross profit contribution we anticipated for the full the full year. • In cotton, there's been a little pickup in U.S. acres that offset a bit of the declining acres in Australia. • Delivering in this tougher environment pressure tests our strategy and validates the value of our portfolio. • We expect to deliver more than $4 billion in new total gross profit growth.
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Posted In: EarningsNewsGuidance
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