Monsanto to eliminate 2600 jobs amid fourth quarter loss

Monsanto said its loss widened to $1.06 a share for the fourth quarter ended on August 31 from a loss of 31 cents a year earlier.

The job cuts are expected over the next two years. And sales at the company’s agricultural productivity unit, which includes Roundup herbicide, dropped to $1.1bn from $1.25bn in the quarter.

Monsanto also noted a significantly bigger quarterly loss and said that combined with the layoffs, its global restructuring would contain “streamlining and reprioritizing” a few of its commercial, development and research work.

The cost savings, buybacks and improved agriculture markets as well as sales of a new genetically modified soybean called Intacta Pro should allow a return to per-share earnings growth exceeding 20 percent a year by fiscal 2017, the company said.

Agrichemical profits in the new financial year were forecast to fall sharply, to $900m-1.1bn, from $1,91bn, reflecting “continuing low” prices of generic glyphosate weedkillers, and the absence of a one-time $274m licensing deal which boosted profits in the latest year. The move came after Monsanto abandoned its efforts to acquire Swiss pesticide producer Syngenta.

This was an apparent reference to St. Louis-based Monsanto’s plan to eliminate 2,600 jobs over the next 18 to 24 months, from a worldwide workforce of about 22,000.

The company said it would still meet its target of more than doubling fiscal 2014 earnings per share, excluding special items, by 2019.

Monsanto also disclosed about $93 million set aside over the quarter for potential environmental and legal settlements related to a Securities and Exchange Commission investigation into herbicide incentive programs, which Monsanto disclosed in 2011, and issues stemming from its former corporate parent Pharmacia, which spun off Monsanto in 2002. In June, the company announced cost cuts, aiming to double per-share earnings in five years from 2014. Revenue fell 10% to $2.36 billion. The FactSet consensus was for a loss of just 2 cents a share and sales of $2.8 billion.

Monsanto shares have fallen 26 percent since the beginning of the year, while the Standard & Poor’s 500 index has dropped roughly 4 percent. The company also said it will repurchase $3 billion in shares under an accelerated buyback plan expected to wrap up in the next six months.