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Monsanto Reports Record Q1 on Earlier US Season, Global Corn Strength


Agricultural products provider Monsanto Company (NYSE: MON) reported record results for the second quarter of fiscal 1012 on Thursday, driven by strong performance of its businesses as well as the timing of an earlier US season. The company has thus raised its full-year EPS guidance.

The company said it its total sales for the quarter amounted to $4.75 billion, which beat consensus estimates by some 220 million or 4.8 percent. Net sales were up 15 percent over the same quarter last year. A strong selling season in the US and growth from Latin America, particularly gains in corn, contributed to growth in net sales. Comparable weakness in vegetable sales, driven primarily by European market decreases and inventory write-offs, therefore, did not put too much of a damper on total revenues.

Diluted earnings per share came in at $2.28, which was 22 percent higher on the previous year's quarter and 7.5 percent higher than consensus estimates. Discontinued and one-time items, such as the Nitro claims settlement, contributed a net 4 cent to the EPS.

Although SG&A and R&D increased by $543 and $353 million respectively, the record growth in the company's top-line meant that they were comparatively smaller to net sales, which contributed to a net income was 26 percent versus 25 percent of revenues in the last quarter.

Reflecting the notable impact of the second quarter to full-year results, the company raised its full-year guidance range for ongoing EPS to between $3.49 and $3.54. Free cash flow guidance was also increased to between $1.6 and $1.8 billion.

MON shares closed at $81.80 on Tuesday and are trading up $1.60 or 1.96 percent in premarket.

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