ST. LOUIS — Monsanto Co., the world’s largest seed maker, said its third-quarter earnings and sales fell 14% and 11%, respectively. In addition, the company said it is creating a separate division for its Roundup and other herbicides business and announced a planned restructuring that will eliminate approximately 900 jobs, or about 4% of its work force.
Net income in the third quarter ended May 31 totaled $694 million, equal to $1.27 per share on the common stock, down from $811 million, or $1.48 per share, in the same period a year ago. The earnings beat analysts’ forecasts of $1.17 per share, but the company’s fourth-quarter profit is expected to be dragged down by the restructuring initiative, which is scheduled to be completed in 2010. As a result, Monsanto said its full-year profit will be on the low end of its previous forecast of $4.40 to $4.50 per share.
Net sales totaled $3,161 million, down from $3,538 million. Despite the decline, which was driven by decreased sales from the company’s Roundup and other glyphosate-based agricultural herbicides globally, Monsanto said it experienced stronger sales for its seed and trait products sold through the company’s U.S. soybean, cotton, corn and vegetable businesses.
For the nine months ended May 31, net income was $2,342 million, or $4.28 per share, up from $2,196 million, or $4.01 per share, in the same period a year earlier. Net sales were $9,845 million, up 6%.
"Our 2009 fiscal year represents a milestone for our business as our seeds and traits business alone will deliver more gross profit than all of Monsanto did in 2007, a remarkable achievement in just two short years," said Hugh Grant, chairman, president and chief executive officer. "Backed by continued strong farmer demand for our higher-yielding seed products and new pipeline technologies on the way, we remain committed to doubling gross profit for the entire company from the 2007 base of $4.2 billion to roughly $8.6 billion to $8.8 billion in 2012."
In creating a separate division for its Roundup and other herbicides business, Monsanto said it hopes to stabilize the business and deliver optimal gross profit and a sustainable level of operating cash in the coming years. The job cuts will vary from country to country and will require a one-time restructuring charge estimated at approximately $350 million to $400 million, according to Monsanto.