Monsanto 3Q profit sinks 37 percent as seed sales fall

Monsanto reported lower-than-expected sales for the sixth successive quarter.

Monsanto Company is in talks with Bayer AG and other companies regarding “alternative strategic options”, a month after it rejected the German company’s $62-billion takeover offer, the USA seed producer said on Wednesday. Monsanto sought to build a similarly comprehensive offering through its unsuccessful bid for Syngenta AG a year ago, and Mr. Grant said Wednesday that he believes Monsanto remains “best positioned to make this strategy a reality”.

Monsanto reported that its third-quarter net income to company decreased to $717 million from $1.14 billion, prior year.

Revenue fell 8.5 percent to $4.19 billion in the period, which also missed Street forecasts.

The seeds and agrochemicals industry, long dominated by six large companies, has been jolted by several large deals in the past year as low crop prices and belt-tightening by farmers pressured earnings. Sales of its weed-control and other agricultural products fell 29 percent. The company now sees adjusted per-share profit this year at the low end of its $4.40 to $5.10 range.

Oil prices rose, also lifting energy shares, after the United States government reported a larger-than-expected weekly decline in crude inventories.

Shares of Monsanto Co. were up more than 3 percent to $104.75 before the stock market opened Wednesday. Shares of Home Depot slipped, last down 0.2 per cent, for the only percentage decline in the Dow in afternoon trading.

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Mr. Grant said that Monsanto’s “growth prospects with or without a deal remain strong” despite a “low point” in the agricultural business that has pressured profits for the world’s top sellers of seeds, pesticides, tractors and fertilizer.

Raising a potential new regulatory hurdle to the transaction, Margrethe Vestager the competition chief of the European Council, the EU’s executive arm, signaled the examination in a June 20 letter in German to two European Parliament members from Germany who oppose the deal.

Monsanto’s willingness now to hold talks doesn’t mean any deals are imminent, and short-term investors anticipating a takeover are likely to be disappointed, according to Matt Arnold, a St. Louis-based analyst at Edward Jones & Co.

The Green Party lawmakers, Martin Haeusling and Sven Giegold, had voiced concerns about the merger to the European Commission, the bloc’s antitrust agency.