Tags: Monsanto | Earnings | Profit | Corn

Falling Corn Prices Stalk Monsanto, Sending Profit Lower

Wednesday, 01 Apr 2015 07:36 AM

Monsanto reported lower-than-expected earnings as slumping corn prices push farmers toward other crops, crimping sales of the company's best-selling biotech corn seeds.

The St. Louis agricultural business giant reported a second-quarter profit of $1.42 billion, or $2.92 per share, down from $1.67 billion, or $3.15 per share, in the prior year period. Sales slid to $5.2 billion from $5.8 billion.

Analysts surveyed by Zacks Investment Research predicted earnings of $2.96 per share on sales of $5.76 billion.

Monsanto's biotech seeds have genetically engineered traits that help farmers increase their crop yield, despite their higher costs.

U.S. farmers are expected to plant fewer acres of corn for the third consecutive year in 2015, down 2 percent from last year, according to survey figures from the U.S. Department of Agriculture. More farmers are favoring soybeans because they cost less to grow and prices farmers receive for soybeans haven't fallen as quickly as corn. Soybeans also can withstand broader weather variations

Monsanto's total seed and seed license revenue declined to $4.18 billion from $4.65 billion mainly due to lower sales of the company's best-selling product, biotech corn seeds, which fell 15 percent to $2.9 billion. Soybean sales partially offset the drop in corn rising to $883 million from $820 million.

Sales of the company's signature herbicide, Roundup, and other agricultural chemicals fell slightly to $1 billion in the period.

Monsanto has recently weathered a wave of negative publicity centered on Roundup, with European officials questioning the weed killer's safety when used in industrial farming.

Last month the International Agency for Research on Cancer labeled the Roundup's key ingredient, glyphosate, a "probable carcinogen." The company has pushed back against the conclusion and demanded a retraction from the group, a French research arm of the World Health Organization. The group has no regulatory powers and no commercial sanctions are expected against Roundup and other weed killers containing the ingredient.

The U.S. Environmental Protection Agency, which makes its own determinations, said it would consider the French agency's evaluation.

Just days later the EPA announced that Monsanto would pay $600,000 in fines for failing to report the release of toxic chemicals at a phosphate plant in Idaho.

The company expects full-year earnings in the range of $5.75 to $6 per share. Those results will be negatively hit by 35 to 40 cents in foreign exchange headwinds as the dollar strengthens against overseas currencies.

Shares of Monsanto Co., which have declined roughly 6 percent since the beginning of the year, rose $2.15, or 1.9 percent, to $114.69 in early morning trading Wednesday.


© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
1Like our page
2Share
Companies
Monsanto reported lower-than-expected earnings as slumping corn prices push farmers toward other crops, crimping sales of the company's best-selling biotech corn seeds.
Monsanto, Earnings, Profit, Corn
424
2015-36-01
Wednesday, 01 Apr 2015 07:36 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved