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St. Louis-based Monsanto Co., producer of seeds and the popular herbicide Roundup, experienced a wider net loss of $233 million, or 43 cents per diluted share, in the quarter ended Aug. 31, compared with a loss of $172 million, or 31 cents per diluted share, in the year-earlier period. The company reported increased profit for its full fiscal year but predicted lower earnings after restructuring costs in its current fiscal year.
The company had restructuring costs of 53 cents per diluted share in the 2009 quarter. This included the cost of staff reductions, streamlining brands, office and facility consolidations and realignment of resources of its global seeds and traits business.
According to Yahoo Finance, analysts expected the company to earn 1 cent per diluted share before restructuring costs.
Quarterly sales declined 8.4 percent to $1.9 billion from $2.1 billion.
According to Daniel Ortwerth, analyst for Edward D. Jones & Co. L.P., Monsanto was the main provider of Roundup herbicides during the 2008 Beijing Olympics, but since then, Chinese manufacturers of herbicides, which were temporarily shut down to decrease pollution, have opened back up, creating more competition and lower sales for Monsanto compared with prior years
“Looking into the future, 85 percent of the business will be seed,” said Ortwerth. He predicted seed sales will grow at double-digit rates because Monsanto is the industry leader. The company’s press release indicated the 85 percent seed growth rate is targeted for fiscal year 2012.
Net income for the fiscal year ended Aug. 31 rose 4 percent to $2.1 billion, or $3.80 per diluted share. That compares with a net income of $2 billion, or $3.62 per diluted share, in the prior year.
Analysts polled by Yahoo Finance had a consensus estimate of $4.41 per diluted share for the 2009 fiscal year.
Monsanto guidance expects $2.85-$3.11 earnings per share in fiscal year 2010, including projected restructuring costs. Monsanto did not provide sales guidance, but Ortwerth expects sales of $11.5 billion in fiscal 2010.
Monsanto expects seeds and traits will increase from 6.8 billion gross profit in fiscal year 2009 to $8.6 billion to $8.8 billion in fiscal year 2012.
The stock closed at $74.33, down $1.03.