Monsanto Company (MON) reported results for the first quarter of 2010, which ended November 30, 2009, and reinstated its full-year guidance. Along with its quarterly earnings results, Monsanto also announced its annual research and development pipeline update.

Net sales decreased $952 million, or 36% year over year to $1,697 million in the first quarter of fiscal 2010 primarily as a result of decreased sales of glyphosate-based herbicides in Brazil and Europe. Monsanto reported a net loss of 3 cents per share in the first quarter of fiscal 2010, compared to a net profit of $1.00 per share in first quarter 2009. The Zacks Consensus Estimate for the reported quarter was a net profit of 1 cent per share.

For the first quarter of fiscal 2010, net cash required by operating activities was $1.4 billion, and the inflow was $114 million in the first quarter last year. Free cash flow was a use of $1.6 billion for the first quarter of fiscal 2010, and the inflow was $124 million in the first quarter of fiscal 2009.

Monsanto reaffirmed its previously announced cash flow guidance. It expects free cash flow for fiscal year 2010 in the range of $900 million to $1 billion Incorporatedluding an after-tax restructuring charge of approximately $250 million.

Monsanto expects net cash from operating activities between $2 billion and $2.2 billion, and net cash required by investing activities between $1.1 billion and $1.2 billion for fiscal year 2010. Monsanto confirmed full-year 2010 ongoing EPS guidance in the range of $3.10 to $3.30. We expect Monsanto to post decent results for the coming quarters based on its product launches.

We maintain a Neutral rating on the shares of Monsanto.

Zacks Investment Research

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