Monsanto Co. (NYSE: MON)
Today before the market opened, Monsanto (MON) announced first quarter earnings that beat expectations but missed on sales. They reported an EPS loss of 11 cent on $2.22 billion in sales while analysts were looking for 23-cent loss per share on $2.38 billion in sales. Commodity and currency prices have hurt MON’s bottom line and to try and offset the losses they announced they would cut another thousand jobs. Investors were not impressed with this news as shares sold off hard in the premarket and as well when the market opened for the day.
“Today, however, the headwinds from currency and commodity prices that we outline at the start of this fiscal year have not yet abated, and in fact currency has become a much stronger headwind with the recent events in Argentina. We are pleased to see the early decisive approach of the new President and we believe that his actions, particularly the lifting of export taxes in grain will create longer-term benefits for agriculture for which we’re well positioned to participate. However, the approximate 35% to 40% devaluation of the Argentine peso is expected to create an estimated $0.20 to $0.25 charge in Q2 and with that increased headwind, we now expect our fiscal year ’16 ongoing EPS to trend to the lower half of our guidance range of $5.10 to $5.60 as shown on Slide 8.” (NASDAQ)
Shares of MON opened the day down on poor sales at $95.77 compared to yesterdays close of $97.28, a 1.5% drop. Shares consolidated around the $96.40 level before selling to daily lows of $93.75 but then a late day rally took place to close at $95.21. Looking back on the daily chart you can see that shares ended 2015 on a down note and they don’t look to improve their situation based on these earnings and layoffs. We should see some support come in around the $92.91 and $90 price while resistance will be met at $97 and $98 levels. Currently analysts have an average price target of $108.55. We’ll have to keep a close eye on this stock but for right now I’m sitting on the sidelines.
Monsanto Co. provides agricultural products for farmers. Its seeds, biotechnology trait products, and herbicides provide farmers with solutions that improve productivity and produce better foods for consumers and better feed for animals. Monsanto operates its business through the following business segments: Seeds & Genomics and Agricultural Productivity. The Seeds & Genomics segment produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis, and De Ruiter and develops biotechnology traits that assist farmers in controlling insects and weeds. The Agricultural Productivity segment manufactures Roundup and Harness brand herbicides and other herbicides. It also provides other seed companies with genetic material and biotechnology traits for their seed brands. Monsanto was founded by John F. Queeny in 1901 and is headquartered in St. Louis, MO. (MarketWatch)