Monsanto Loss Widens as Corn Sales Fall
07 Oktober 2015 - 3:30PM
Dow Jones News
Biotech seed giant Monsanto Co. said its loss widened in its
latest quarter, as corn-seed sales continued to weaken.
The company also forecast earnings, excluding items, for its new
fiscal year of $5.10 to $5.60 a share, well below analysts'
forecasts of $6.19.
Monsanto also said it plans some restructuring actions to
optimize its business and announced a new stock-buyback program
totaling $3 billion. Shares declined 2.3% in premarket trading.
The St. Louis company has grappled with a stronger U.S. dollar,
which makes its seeds and crop spray more expensive for farmers
outside of the country. At the same time, sagging commodity prices
have diminished farmers' spending power and dampened demand for
high-tech seeds from Monsanto and rivals like DuPont Co. The price
of corn, Monsanto's main source of seed sales, is down about 2%
this year.
In the face of those issues, Monsanto tried to acquire Swiss
agribusiness giant Syntenta AG, but the company dropped its pursuit
in August after Syngenta rejected its increased $46 billion
takeover bid.
For the latest quarter, Monsanto reported a loss of $495
million, or $1.06 a share, from a year-earlier loss of $156
million, or 31 cents a share. Excluding certain items, the
company's per-share loss was 19 cents, compared with 27 cents.
Revenue slid 10% to $2.36 billion.
Analysts projected a loss of 2 cents a share on sales of $2.77
billion, according to Thomson Reuters.
Gross margin fell to 42% from 47%.
Corn sales, Monsanto's biggest source of profit, declined 5.1%
to $598 million. U.S. farmers are expected to dedicate more fields
to soybeans in pursuit of higher profits, and the company has said
it stands to benefit over the long-term as it releases newer
varieties designed to produce more of the oilseed per acre. In the
latest period, soybean sales dropped 19% to $162 million.
Sales in the company's agricultural productivity segment, which
includes its Roundup brand weed killer, fell to $1.1 billion from
$1.25 billion.
Write to Nathan Becker at nathan.becker@wsj.com and Lisa
Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 07, 2015 09:15 ET (13:15 GMT)
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