uploads///Monsanto Segments Performance in Q

Seeds and Genomics Contributed 53.2% to Net Sales for 4Q15

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Oct. 12 2015, Updated 8:07 a.m. ET

Seeds and Genomics segment

Monsanto’s (MON) Seeds and Genomics segment consists of the global seeds and related traits business, biotechnology platforms, and precision agriculture. Its sales were recorded at $1.3 billion in 4Q15. For fiscal 2015, the company’s segment sales were $10.2 billion. It was led by another significant year for its global soybean portfolio. This included the record-setting adoption of Intacta RR2 PRO on 15 million acres in South America. The company also confirmed that it held or grew share in every major corn market in 2015. The soybean opportunity will be complemented by the company’s global corn business in fiscal 2016.

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Monsanto’s investment in its climate and biological platforms also rose in fiscal 2015. The company enrolled more than 75 million acres in its Climate platform, with more than five million acres on its premium acre offering. As the company expands its portfolio of integrated solutions for farmers, this segment remains a differentiator and an integral part of Monsanto’s long-term growth targets.

The climate established itself as the industry’s digital agriculture platform in 2015. Within the digital agriculture space, Monsanto expects the climate platform to expand to more than 90 million acres in 2016 with more than 12 million of the acres using its premium offerings.

Agricultural Productivity segment

The Agricultural Productivity segment consists of crop protection products and lawn-and-garden herbicide products. The segment’s sales reached $1.1 billion for the quarter. For fiscal 2015, the segment delivered net sales of $4.8 billion.

With $274 million in a one-time licensing benefit in fiscal 2015 and the continuing low generic glyphosate pricing levels, the company expects the Agricultural Productivity segment’s gross profit to be $900 million–$1.1 billion in fiscal 2016.

The company plans to stay consistent with its strategy as it continues to adjust its pricing to maintain a slight premium over the generics. Beyond fiscal 2016, the continued strategic management of the Agricultural Productivity segment is expected to support the Seeds and Genomics segment and new growth opportunities.

The Vanguard Materials ETF (VAW) has ~7.2% of its holdings in Dow Chemical Company (DOW). VAW fell 11.5% YTD (year-to-date). Its peers DuPont (DD), Dow Chemical Company, and Syngenta (SYT) reported an operating margin of 15.4%, 8.4%, and 5.7% in the last reported quarter.

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