Will Monsanto Earnings Grow Higher?

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Monsanto will release its quarterly report on Wednesday, and investors have benefited from the stock's return to near multi-year highs. Yet even as Monsanto earnings look like they'll post their typical seasonal loss for the quarter, the bigger question for the company is whether rivals DuPont and Dow Chemical will move more heavily into the same business segments that have brought Monsanto so much success.

Monsanto draws strong emotional reactions from advocates and critics alike. Some see the company as the most hated in the world because of its production of genetically modified organisms in agriculture. With a market share that's well ahead of DuPont, Dow, and Syngenta , Monsanto draws the lion's share of GMO-related criticism even though it's far from the only company to use such technology. Let's take an early look at what's been happening with Monsanto over the past quarter and what we're likely to see in its report.

Stats on Monsanto

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$2.24 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will Monsanto earnings fare this quarter?
Analysts have had mixed views in recent months on Monsanto earnings. They've widened their loss estimates for the August quarter by $0.02 per share, but they've boosted their full-year fiscal 2014 profit projections by $0.03 per share. The stock, meanwhile, has climbed about 5% since late June.

Monsanto has had fairly strong success this year, with its end-of-June quarterly report showing a big jump in corn-seed sales. Corn is a big part of Monsanto's overall business, driving almost half of its total revenue, and corn plantings at high levels helped sustain demand. Having made a cross-licensing deal with Dow Chemical to obtain an herbicide-tolerant trait, Monsanto clearly sees the value in keeping its technology on the cutting edge.

But Monsanto has raised controversy because genetically modified strains of crops have been found even where they weren't intended. In June, unapproved GMO wheat was found at an Oregon farm, and a similar finding in Washington State in alfalfa has raised broader fears about GMO crop infiltration. Most countries have substantial restrictions on importing genetically modified food, and so the unintended presence of GMOs has huge potential consequences for the U.S. agricultural industry if farmers can't export their products.

Nevertheless, Monsanto's rivals are largely following it into the agriculture realm. DuPont is looking to sell off its performance-chemicals business to focus more on the agriculture business. Syngenta has likewise recognized the need for increased crop yields around the world and has moved strongly toward trying to develop variants that will help fight disease and boost crop volumes.

In the Monsanto earnings report, watch to see how well the company does at pushing its way into new markets like those on the African continent. As the war over genetically modified food rages on, Monsanto will likely remain volatile, but its growth potential remains impressive given the global demographics supporting the need for its products.

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The article Will Monsanto Earnings Grow Higher? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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