What to Expect for Monsanto's 4Q17 Earnings

1 2 3 4 5 6 7
Part 3
What to Expect for Monsanto's 4Q17 Earnings PART 3 OF 7

Monsanto’s Gross Margin Expectations for 4Q17

Gross margins

When looking at commodities such as agricultural chemicals (MXI), it is important to discuss margins, as players such as Monsanto (MON), PotashCorp (POT), FMC (FMC), and CF Industries (CF) are sensitive to price movements.

Monsanto&#8217;s Gross Margin Expectations for 4Q17

Interested in MON? Don't miss the next report.

Receive e-mail alerts for new research on MON

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Analysts’ expectations

In 4Q17, analysts’ mean expectation for Monsanto’s gross income is $1.06 billion with a top line of $2.5 billion, which translates to a 42.1% gross margin. Comparing this with the gross income of $1.15 billion, top line of $2.56 billion, and gross margin of 45% seen a year prior suggests a margin contraction.

For the next four quarters, the company’s margins are expected to contract from 53.5% to 52.8%. Whereas analysts expect sales growth of 3.8% for Monsanto, its gross income is expected to grow by just 2.5% over the next four quarters.

Lower crop prices have narrowed the scope of margin sustenance for agricultural chemical companies. In a bid to protect margins, companies have resorted to cost-cutting measures such as consolidating with other players by way of mergers and acquisitions. Next, we’ll discuss the company’s EBITDA (earnings before interest, tax, depreciation, and amortization) margins.



Please select a profession that best describes you: