An Important Look at Monsanto’s 4Q17 Overall Profitability
In this part of the series, we’re going to zoom out and look at Monsanto’s (MON) overall profitability for fiscal 4Q17. As we saw in the previous part, Monsanto’s overall gross margins expanded year-over-year from 44.4% to 49.9%. Let’s see how other profitability measures fared during the quarter.
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EBITDA (earnings before interest, tax, depreciation, and amortization) margins, as shown in the above chart, are calculated after making adjustments to exclude one-time items. EBITDA margins appear to have slightly contracted year-over-year from 7.3% in 4Q16 to 7.0% in 4Q17. However, adjusted net margins have improved year-over-year from 1.2% to 3.1% over the same period.
During the earnings call, Monsanto’s management stated that growth in profits for its Seeds and Genomics segment was “fueled by the outstanding penetration of our latest soybean and cotton technologies and continued adoption of our newest corn hybrids around the globe, reflecting the need for new solutions in what continues to be a challenging ag economy.”
In the next part of this series, we’ll look at management’s updates on Monsanto’s future growth drivers.