Monsanto 4Q Loss Widens As Seed Sales Decline

Earns Monsanto
Seth Perlman/AP

WASHINGTON -- Monsanto reported worse-than-expected losses for its fiscal fourth quarter on Wednesday, due to lower sales of its genetically engineered seeds.

The company forecast for fiscal 2014 also came in below Wall Street expectations, and it revealed plans to buy farming software and data firm the Climate Corp. The combination sent Monsanto (MON) shares lower in premarket trading.

The St. Louis-based company recorded a loss of $249 million, or 47 cents a share, for the quarter ended Aug. 31. That was wider than its loss of $264 million, or 42 cents a share, in the 2012 fourth quarter. Revenue climbed 5 percent to $2.2 billion from $2.1 billion last year.

Analysts, on average, expected a loss of 43 cents a share, on sales of $2.26 billion, according to data provider FactSet.

The company's performance was hurt by a steep drop in sales of genetically modified soybean seeds, which fell 38 percent to $87 million. That drop was offset by higher sales of the company's best-selling product, genetically modified corn seeds, which rose 5.1 percent to $618 million. But overall seed sales still edged lower to $1.19 billion for the quarter

Looking ahead, Monsanto said it expects to report earnings a share of $5 to $5.20 in fiscal 2014, including 14 cents from its planned acquisition of the Climate Corp. Analysts were looking for $5.31 in earnings per share for fiscal 2014, on average.

Company shares fell $2.54, or 2.5 percent, to $102.94 in premarket trading. The stock closed at $105.05 Tuesday, up 11 percent since the start of the year and near the top end of its 52-week trading range of $82.70 to $109.33.

Monsanto said in a separate release it would pay $930 million in cash for the Climate Corp., which was founded in 1996 by engineers from Google (GOOG) and other Silicon Valley companies. The company's technology uses weather forecasting and data analysis to help farmers plan their growing seasons.

Monsanto, which has dominated the bioengineered-seed business for more than a decade, reiterated its expectation for ongoing earnings growth in the "mid-teens" for fiscal 2014, based on the company's international growth.

In June, Chinese regulators approved the importation of Monsanto's Intacta soybeans, the first variety of the bean that has been genetically modified to repel pests that eat the crop. The new soybean is rolling out in Brazil this season and will be available in Argentina the following year. Both countries are major exporters to China. Intacta is the company's first product specifically designed for use outside the U.S.

The company's biotech seeds have genetically engineered traits that the company says benefit farmers enough that they come out ahead, despite the seeds' higher cost.

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Hopefully, Monsanto will go bankrupt before their experiment on humans world wide has devastating consequences.

October 02 2013 at 12:49 PM Report abuse +2 rate up rate down Reply