Monsanto to slash jobs on fourth-quarter losses
The statement represents a third setback within hours for the agricultural inputs sector, after Platform Specialty Products, the owner of sprays group Arysta, cut its forecast for full-year results, and Macquarie forecast lower fertilizer prices ahead.
The biotech-seed maker said it planned to cut 2,600 jobs while “streamlining and reprioritizing” commercial and research efforts as it grapples with declining crop prices that have pinched incomes for farmers, its main customers.
Monsanto said it will accelerate $3 billion of share repurchases under a program that was suspended during its failed $46 billion bid for Syngenta AG. And sales at the company’s agricultural productivity unit, which includes Roundup herbicide, dropped to $1.1bn from $1.25bn in the quarter.
Monsanto announced the layoffs as it reported a $495-million loss for its fiscal fourth quarter, compared with a net loss of $156 million in the same period a year earlier. It is developing further plans to reduce operating spending by an additional $100 million, bringing total annual savings to as much as $400 million. That was still below the average estimate of eight analysts surveyed by Zacks Investment Research who were looking for a loss of 1 cent per share. The business earned $2.36 billion during the quarter, compared to analysts’ expectations of $2.79 billion.
Monsanto estimated earnings per share in fiscal year 2016, which began September 1, in the range of $5.10 to $5.60 on an ongoing basis that excludes exceptional items, down from $5.73 last year.
In the recent years, Monsanto’s genetically-enhanced corn seeds have dwindled on their market sales.
The company said it expected the initial phase to lead to annual savings of $275 to $300 million by the end of fiscal 2017, at a total cost of $850 million to $900 million. It projected earnings in its fiscal… It handles business. Through its Seeds and Genomics segment, it makes seed brands, including Seminis, Asgrow, Deltapine, DEKALB and De Ruiter, plus it develops biotechnology traits that assist farmers in controlling insects and weeds.
Monsanto Company (NYSE:MON) opened at 87.54 on Wednesday. They have fallen 26 percent since the beginning of the year, while the Standard & Poor’s 500 index has dropped roughly 4 percent.