Monsanto sales of vegetable seeds down in Q2 2016

Monsanto Company announced second quarter 2016 results in line with expectations: "The company continues to execute on key initiatives within its core business, led by new global corn hybrid portfolio introductions, significant Intacta RR2 PRO soybean adoption, launch of its new Roundup Ready 2 Xtend varieties and continued progress within its digital agriculture platform with a series of extended partnerships. The company also remains disciplined in the optimization of its spend and targeted capital structure with the recent completion of its $3 billion accelerated share repurchase (ASR) agreements. The company noted its estimate for fiscal year 2016 as-reported EPS improved, while ongoing EPS and free cash flow remain in the ranges of its recently revised guidance."

Results of operations
Net sales for the fiscal year 2016 second quarter decreased over the prior year’s second quarter to approximately $4.5 billion, with gross profit for the quarter also decreasing over the prior year period to approximately $2.6 billion. For the first six months of fiscal year 2016, net sales were approximately $6.8 billion and gross profit was approximately $3.5 billion.

Selling, general and administrative costs were $586 million and research and development expenses were $340 million for the second quarter of fiscal year 2016.

The company's fiscal year 2016 second quarter EPS was $2.41 on an as-reported basis and $2.42 on an ongoing basis. On an as-reported basis, second quarter 2016 EPS was down 17 percent, while ongoing second quarter 2016 EPS was essentially in line with the prior year period on a currency neutral basis.

The positive drivers in the quarter, namely the benefits of the company's reduced share count, Brazil corn pricing, increased Intacta RR2 PRO soybean adoption and reduced operating expenses, were offset by glyphosate declines in the Agricultural Productivity segment, increased discounting in the United States in corn and soybeans, lower soybean volumes with the slower start to the U.S. season and expected lower acres, as well as higher corn cost of goods sold resulting from smaller production plans in the prior year.

View the full quarterly results here.