Monsanto Plans Jobs Cut Sees Lower Earnings Monsanto

Monsanto Plans Jobs Cut, Sees Lower Earnings

Monsanto said it plans a global restructuring that will eliminate about 2,600 jobs over the next 18 to 24 months.

NEW YORK - Seed giant Monsanto Co. (IW 1000/278) forecast a fall in full-year earnings on Oct. 7 and announced job cuts in anticipation of continued low commodity prices that have hit the agriculture industry.

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.

The company's earnings outlook came in well below the $6.22 average estimate, according to Bloomberg News.

Monsanto said it plans a global restructuring that will eliminate about 2,600 jobs over the next 18 to 24 months. The company did not provide details on the job cuts. It currently employs about 22,000 people worldwide.

"As we look to 2016, focus and discipline become increasingly important," said Hugh Grant, Monsanto CEO.

Monsanto reported fiscal year 2015 profit fell 15.5% from a year earlier to $2.31 billion, in part due to the fall in commodity prices and legal and restructuring charges.

For the fourth quarter, the St. Louis, Missouri-based company posted a $495 million loss, more than triple the loss a year ago.

Full-year revenues were $15.0 billion, while fourth-quarter revenues were $2.36 billion, both weakening from the year-ago periods. 

"We will continue to focus on executing on key milestones within our core seeds and traits business, and we plan to remain disciplined in our agricultural productivity strategy," Grant said, citing plans to cut spending through restructuring.

The overhaul moves, including an exit from sugarcane activities, would yield annual savings of $275 million to $300 million by the end of fiscal year 2017, the company estimated.

Including plans to further reduce operating spending by $100 million, Monsanto said the total annual savings could reach $400 million.

Monsanto also announced a new $3 billion accelerated share buyback program, after completing a $6 billion repurchase program in 2015.

Monsanto shares, which had fallen sharply in pre-market trade after the earnings report, were up 0.7% at $88.16 on the New York Stock Exchange.

Monsanto had a difficult fiscal 2015, with sales of its genetically modified seeds, the main source of revenues, falling 4.6% in the wake of a 2% drop in corn prices and a 12.7%plunge in soybeans.

Sales of fertilizers and herbicides fell 7%, impacted by a ban by several countries of its Roundup weed killer, which the World Health Organization says has ingredients that are "possibly carcinogenic" to humans.

The strong dollar has made Monsanto products less competitive, particularly in key markets like Brazil. The Brazilian real has fallen about 35% against the dollar this year.

Copyright Agence France-Presse, 2015

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish