Monsanto Results Hit by Currency Effects, Glyphosate Pricing
6 January 2016 Monsanto’s first-quarter earnings and sales declined from a year ago, hurt by weaker foreign currencies, glyphosate pricing and lower corn volumes in Latin America.
The company posted a net loss of $253 million in the period, reversing a profit of $243 million a year ago.
On an ongoing basis, it reported a per-share loss of $0.11, ahead of the company’s outlined guidance of a loss in the range of $0.23 to $0.33. This improvement was driven by lower than expected operating expenses and higher than expected Brazil Intacta RR2 PRO soybean results.
Monsanto total net sales for the first quarter were $2.2 billion, compared with $2.9 billion in the same period a year ago.
Its Agricultural Productivity segment, which comprises crop protection and lawn-and-garden herbicide products, reported sales of $820 million in the quarter, down from $1.2 billion a year earlier.
Monsanto said it continues to expect Agricultural Productivity segment gross profit to be in the range of $900 million to $1.1 billion in fiscal year 2016 with the expectation that timing-related declines in volumes from the first quarter will be recovered in the latter half of the year. The company continues to expect to sell approximately 300 million gallons of glyphosate for the full year at a premium close to that of generics, it said.
“Through focus and discipline, we remain confident in our ability to deliver on the targets and milestones we’ve established for our company in both the near term and through the next decade,” said Hugh Grant, chairman and chief executive officer. “In a challenging agriculture environment, we remain in a position of strength. It’s this strength that positions us to be a leading partner in an industry that will continue to change.”
“This is an exciting time in agriculture and within our company as we continue to expand the breadth and pace of innovation,” said Dr. Robb Fraley, executive vice president and chief technology officer, regarding this year’s annual pipeline update. “We’ve seen incredible progress across our core pipelines of breeding, biotechnology and chemistry, along with our growth platforms of data science and biologicals. Through a truly integrated approach to delivering solutions, we are uniquely positioned to support farmers in their efforts to improve yields and overall productivity in a sustainable way.”
With the anticipated continuation of several global and industry headwinds that include the recent currency devaluation in Argentina, Monsanto expects full-year ongoing EPS guidance to be at the lower half of the range of $5.10 to $5.60. Ongoing EPS guidance reflects in part an estimated $0.60 to $0.70 of headwinds from currency, greater than previous estimates of $0.35 to $0.40. Full-year EPS guidance on as as-reported basis improved modestly to $4.12 to $4.79 as a result of the anticipated timing of charges related to announced restructuring actions.
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