DOW JONES NEWSWIRES
Monsanto Co.'s (MON) fiscal third-quarter earnings fell 14% as
cooler, wetter weather and increased competition lowered revenue at
its Roundup and related herbicide operations.
The company also announced plans to separate its Roundup and
other herbicides into a new division, and announced a restructuring
that will cut its work force nearly 4%, or 900 workers.
Shares rose 1.9% premarket to $80.92 as the quarter's results
topped analysts' expectations.
A three-year commodities boom ended last year. Though prices are
down dramatically since last summer, they remain historically high.
Monsanto is looking to biotechnology research for future growth
amid heightened competition and expectations Roundup's growth may
fade after this year.
Chairman and Chief Executive Hugh Grant said Monsanto has gone
through a dramatic transition in the past six years as its evolves
from "a company historically built on chemical innovation." The
restructuring moves will bring more "clarity and predictability" to
its Roundup business as it shifts its focus to seeds and
traits.
For the quarter ended May 31, the world's largest seed producer
by revenue reported a profit of $694 million, or $1.25 a share,
down from $811 million, or $1.45 a share, a year earlier. The
company last month slashed its earnings estimate to $1.15 a share
on the weather impact and competition from Chinese generic
rivals.
Revenue decreased 11% to $3.16 billion. Analysts polled by
Thomson Reuters were looking for revenue of $3.45 billion.
Gross margin rose to 58% from 55.6%.
Seeds and genomic segment revenue rose 9.8% as corn sales
increased 4.6% and soybean sales were up 21%. At the operations
that include herbicides, revenue slid 39% as sales of Roundup and
similar products slumped dropped 47%.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com
