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.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in