Monsanto expands cost-cutting plan to eliminate 1000 jobs

Monsanto on Wednesday said it swung to a $253-million loss in the first fiscal quarter, amid foreign currency pressures and falling sales of its biotech-enhanced corn seeds.

CHICAGO Jan 6 Monsanto Co plans to cut an additional 1,000 employees worldwide, bringing its total planned job cuts to 3,600 or about 16 percent of the company’s global workforce, according to a filing Wednesday with the federal Securities and Exchange Commission.

The company also expects the Agricultural Productivity segment to continue to deliver $900 million to $1.1 billion of gross profit in fiscal year 2016 as the company stays consistent with its strategy to maintain a slight premium over generics. Monsanto, based in St. Louis was expected by analysts to have a loss reaching 23 cents per share.

The group also attributed the loss – the first for a September-to-November quarter in six years – to lower volumes in Latin America of corn seed sales, as farmers switch to soybeans, which have been offering them better returns prospects. Wall Street expected revenues of $2.39 billion for the quarter.

With the anticipated continuation of several global and industry headwinds that include the recent currency devaluation in Argentina, Monsanto expects fiscal year 2016 ongoing earnings per share guidance to be at the lower half of the range of $5.10 to $5.60.

Monsanto is streamlining its business as seed, pesticide and equipment makers grapple with a three-year slide in crop prices that has forced farmers to scale back spending on tractors and farm supplies. Those results were partially offset by higher soybean sales, which grew 10 percent to $438 million.

“The headwinds from currency and commodity prices that we outlined at the start of this fiscal year have not yet abated and in fact currency has become a much stronger headwind with the recent events in Argentina”, CEO Hugh Grant told analysts Wednesday.

Monsanto shares fell $2.41, or 2.5 percent, to $94.33 in afternoon trading. The company’s year ends in August, and Monsanto is planning on streamlining its business that has seen crop prices fall.

This story corrects that the $1.1 billion to $1.2 billion figure cited by Monsanto represents the costs of the restructuring plan, not the savings. Its revenue fell 23 percent, not 17 percent. On a net basis, the loss for the period was 56 cents a share.