Tuesday, April 1, 2008

a preview on mon

mon, the agricultural seed and chemical company, is scheduled to report second-quarter 2008 results before the market opens tomorrow. they will follow up with a conference call that morning.

mon is expected to earn $1.72 per on revenue of $3.60 billion. in the year-ago quarter, the company earned 98 cents per share on revenue of $2.62 billion.

the current EPS estimate for mon jumped up within the last week from $1.50 to $1.72 after the company raised its second-quarter 2008 guidance to $1.75 and its full-year 2008 guidance to a range of $3.15 to $3.25. (analysts were at $3.03 before the guidance lift.)

in the last few days, mon has received several upgraded price targets. despite that news, some of the steam seems to be coming out of the agricultural complex. this seems to be more technical than fundamental as more land is being devoted to the growing of crops such as corn, wheat and soybeans.

on a fundamental basis, mon - along with pot, mos and agu, to name few - has continued to benefit from the increased demand for biofuels in this country and for basic food sources in the emerging economies.

a recent strike in argentina has caused a shortage of corn, soybeans and wheat, forcing bg to declare force majeure on contracts for shipment of these grains. clearly, this is going to be a sector that will be subject to a fair amount of volatility, but i believe that we are still in a long-term bull market for the agriproduct sector.

disclosure: long mon

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