The stock is down $3.70 (5.05%) at $69.62.
Monsanto reported earnings this morning, and while they topped estimates, investors aren’t terribly pleased. MON’s shares are trading more than 4% lower.
Despite the flurry of headlines about higher food prices, it’s not a good market day for ag-related stocks, a group I like to watch since I’m from ag-rich Minnesota. Monsanto seed rival DuPont is off 0.3%, Mosaic, Potash Corp and CF Industries, all fertilizer and ag plays, are also lower. Even Deere is drifting down 0.5%.[you actually used roundup in the headline!? -ed]
Here’s what the Street is saying about Monsanto’s numbers:
Goldman (Americas Buy List)
Results in the quarter were essentially in line with expectations with some puts and takes below the surface. Most impressive to us was the gross margin lift at Soybean seeds and the gross profit rebound at Ag Productivity (although management did not raise its FY11 Ag Productivity GP goal). With its largest EPS quarter now behind it, we think catalysts for MON shift to RIB approval and farmer commentary on performance of SS and RR2 in the field. Given recent conversations with farmers, we believe that RR2 adoption is running ahead of schedule, which was reflected in the 2Q11 results today. [RIB is ‘refuge-in-the-bag’, an insect control product; SS (SmartStax) and RR2 (RoundupReady2) are high-tech seeds.]
Morgan Stanley (Overweight)
Monsanto reported F2Q11 results that were ahead of our expectations solely due to lower than forecasted SG&A, R&D and tax rate. Sales and gross profit came in modestly below our expectations, largely due to corn. Bulls are likely to argue the company is being conservative with guidance given a very high level of deferred revenue and the histrionics of prior years, while bears will say that not printing a big F2Q materially limits the upside to F2011 guidance. We expect the stock to be flat to down today as bulls and bear extrapolate management’s commentary on today’s conference call....MORE