What Analysts Expect for Monsanto’s Earnings Margins



Expectations for 4Q17

Earlier in this series, we saw that analysts expect Monsanto’s (MON) gross income to grow slower than its sales over the next four quarters. In this part, we’ll look at what analysts expect for the company’s operating cost structure in 4Q17.

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Monsanto’s earnings

In 4Q17, analysts expect Monsanto’s EBITDA (earnings before interest, tax, depreciation, and amortization) to be ~$66 million, which will translate into an EBITDA margin of ~2.6%, with a top line of $2.5 billion. These results would be weaker than the company’s EBITDA of $187 million and EBITDA margin of 7.2% in 4Q16.

The fourth and the first quarter are usually the slowest for Monsanto due to seasonality, which also boosts earnings volatility for players (NANR) Syngenta (SYT), Agrium (AGU), and Mosaic (MOS). Therefore, it is helpful to see these company’s figures over four consecutive quarters to gauge their performance.

For the next four quarters, analysts expect Monsanto to see EBITDA of $4.3 billion, a 3.1% rise from the $4.2 billion seen in the previous four quarters, resulting in a slight year-over-year margin contraction to 28.5% from 28.7%. Next, we’ll discuss earnings per share estimates for Monsanto.



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