Monsanto (NYSE:MON) Profits Fall, Sacks 2600 Workers
$MON, $DD, $SYT
Monsanto Co.(NYSE:MON) said it will eliminate 2,600 jobs as part of a cost-savings plan, joining a growing list of major corporations struggling to contain the damage from the decline in world commodities prices and a strong USD.
The St. Louis-based agro giant announced the reductions about 12% of its workforce, as it reported a loss of $0.19/share in the F Q-4, and warned profit would remain weak through Y 2016.
Monsanto, the world’s largest seed maker, is taking steps to combat the effects of a commodity slump that reduced farmer incomes for 2 straight years. Moves to trim expenses include re-prioritizing some research and development efforts and exiting the sugar-cane business to save as much as $300-M a year..
Monsanto fell 2 cents to 88.06 in New York. The shares are off 26% YTD.
Profit will fall to 5.10 to 5.60 a share in the 12 months that began on 1 September, excluding restructuring costs, from 5.73 a year earlier, Monsanto said Wednesday in a statement. That compares with $6.22, the average of 23 estimates compiled by Bloomberg. The last time that profit dropped was in 2010.
Monday, DuPont (NYSE:DD), Monsanto’s largest competitor, cut its forecast for Y 2015 earnings, citing weak agriculture markets in Brazil and the USD’s strength against the Real. DuPont Chairman and Chief Executive Officer Ellen Kullman abruptly stepped down. Also, Wednesday, Platform Specialty Products Corp., another U.S. rival, cut its earnings forecast.
Monsanto said it will accelerate $3-B of share repurchases under a program that was suspended during its failed $46-B bid for Syngenta AG (NYSE:SYT).
The cost savings, buybacks and improved agriculture and currency markets as well as sales of a new GM (genetically modified) Soybean called Intacta Pro should allow a return to per-share earnings growth exceeding 20% a year by F-Y 2017, the company said. Additional restructuring plans being developed could reduce expenses by an additional $100-M, Monsanto said.
F-Q-4 profit also missed expectations. The loss in the 3 months ended 31 August a seasonally weak period dependent on sales in South America, compared with the 3-cent loss estimated on average by analysts.
| Symbol | Last Trade | Date | Change | Open | High | Low | Volume |
| NYSE:MON | 88.06 | 7 Oct-2015 | -0.02 | 83.91 | 89.8 | 83.81 | 9,064,000 |
| HeffX-LTN Analysis for MON: | Overall | Short | Intermediate | Long |
| Bearish (-0.48) | Bearish (-0.25) | Bearish (-0.49) | Very Bearish (-0.71) |
Stay tuned…
HeffX-LTN
Paul Ebeling
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