Earnings Preview For Monsanto (MON)

Monsanto Company MON will be reporting 2011 fiscal second-quarter earnings before the bell tomorrow. Analysts are expecting the firm to report a profit of $1.85 per share on $4.15 billion in revenues. If these targets are hit, it would represent high single-digit growth in both sales and profits over the year ago period. The company provides agricultural products for farmers in the United States and internationally. It operates in two segments, Seeds and Genomics, and Agricultural Productivity. Analyst estimates have been flat at $1.85 per share over the past 60 days. As always, investors will be digging deeper than the headline earnings and sales figures. The company's seed order book will be eyed for signs that momentum is still "good" as management put it in its last conference call. Also, analysts will be looking to see how the company is pricing its key Roundup product, especially in China where selling prices have been rising. Valuations look rich with the stock trading at 25.6x current-year estimates of $2.85 per share. This could be a factor as to how the stock reacts after the earnings announcement. It will be harder for the bulls to push it up due to its lofty valuations, while bears will pounce on any perceived weakness to drive the stock lower. Monsanto has missed estimates in two of its previous four quarters.