Monsanto Co.’s revenue slid 23% in the first quarter as corn sales weakened, and the biotech seed giant said it would ramp up its restructuring efforts and cut another 1,000 jobs. In October the company first announced the restructuring plan, meant to streamline its sales, R&D and other operations.
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The St. Louis-based company says the additional cuts will help generate between $1.1 billion and $1.2 billion in total savings, up from previous estimates of $850 million to $900 million.
Monsanto shares fell 59 cents to $96.15 in morning trading Wednesday.
Indeed, Monsanto attributed its decline to an after-tax loss of $253m in the latest quarter – from a $243m profit a year before -largely to “weaker foreign currencies”, as well as to lower prices of glyphosate weedkillers – the type which includes its Roundup brand. When adjusted for one-time items, the loss was 11 cents per share.
Analysts had forecast for a loss of 22 cents a share on revenue of $2.41 billion for the most recent quarter.
Monsanto said it is on track to reach its target of more than 30 million acres sown with the new seed during fiscal 2016. Soybean sales grew 11% to $438 million.
Monsanto is streamlining its business as seed, pesticide and equipment makers grapple with a three-year slide in crop prices that has forced farmers to scale back spending on tractors and farm supplies.
Monsanto has been the leader in the genetically engineered seed industry for over a decade, and has begun to develop such products specifically for emerging markets in parts of Asia and South America.
The company cautioned that its fiscal 2016 results would likely be in the lower range of its full-year guidance, $5.10 to $5.60, due to financial pressures, including the devaluation of Argentina’s peso.
“Currency has become a much stronger headwind with the recent events in Argentina”, said Monsanto CEO Hugh Grant, referring to the country’s move in December to devalue its currency, according to The Wall Street Journal.
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The US group, the world’s biggest seeds company, reduced to $4.12-4.79 per share, from $4.44-5.01 per share, its forecast for earnings in the year to the end of August. Meanwhile, in the agricultural productivity segment, Monsanto’s sales fell by more than a third, to $820 million, and pre-tax profit took an 85% hit to just $59 million.
