Monsanto (MON) - Very Good Earnings and Raised Guidance

Well the agricultural boom just continues as seed/herbicide company Monsanto (MON) shows this AM with a big beat on earnings and sizable increase in guidance. While they did lowball guidance at last quarter conference call this was quite a mashing of those estimates.

• Agricultural company Monsanto Co (NYSE:MON - News) said on Thursday its quarterly profit nearly tripled, helped by strength in its corn seed and herbicide businesses, and raised its 2008 forecast.
• Net income rose to $256 million, or 46 cents per share, in the first quarter ended November 30 from $90 million, or 16 cents per share, a year earlier. That profit beat both the company's and analysts' forecasts for earnings of 35 cents per share, according to Reuters Estimates.
• The St. Louis, Missouri-based company reported net sales of $2.1 billion, up 36 percent from a year earlier.
• Sales of corn seed and traits during the quarter jumped to $467 million from $360 million a year ago, while sales of its Roundup and other glyphosate-based herbicides climbed to $1.0 billion from $649 million.
• The company raised its forecast for 2008 earnings to between $2.50 and $2.60 per share from its November forecast of $2.20 to $2.40 per share.

Even with this increased guidance, Monsanto trades at nearly 45x 2008 estimates, which is part of my beef with starting a position. But as I wrote yesterday, this seems like an expensive stock that will just remain expensive as its one of the few non fertilizer, non tractor ways to play agriculture. The chart speaks for itself. Impressive stuff and I expect much of the same in the fertilizers in a few weeks.

No position