Monsanto Q4 Loss Widens, To Cut 2,600 Jobs

(RTTNews) - Agricultural products giant Monsanto Co. (MON) on Wednesday reported a loss for the fourth quarter that widened from last year, reflecting lower revenues and margins.

The results for the quarter missed analysts' expectations and the company also forecast fiscal 2016 earnings well below their estimates, citing the anticipated continuation of global and industry headwinds.

Monsanto said it expects to cut about 2,600 jobs over the next two years and exit the sugarcane business under a restructuring plan to cut costs, amid falling commodity prices.

The company also announced a new $3 billion accelerated share repurchase program under its current share repurchase authorization and expects it to be completed in the next six months.

The St. Louis, Missouri-based seed and agrochemical company's net loss for the fourth quarter was $495 million or $1.06 per share, wider than loss of $156 million or $0.31 per share in the prior-year quarter.

Excluding special items, loss per share on an ongoing basis was $0.19, compared to loss of $0.27 per share in the year-ago period. On average, 20 analysts polled by Thomson Reuters expected the company to report loss of $0.02 per share. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 10 percent to $2.36 billion from $2.63 billion in the same quarter last year and also missed analysts' consensus estimate of $2.76 billion.

Segment wise, seeds and genomics revenues declined 9 percent to $1.25 billion. Corn seeds and traits sales, accounting for 48 percent of the segment sales, decreased 5 percent.

In the Agricultural Productivity segment, net sales declined 12 percent from last year to $1.10 billion.

The company's gross margin for the quarter declined to 42 percent from 47 percent in the year-ago period.

Looking ahead to fiscal 2016, Monsanto forecast reported earnings of $4.44 to $5.01 per share and ongoing earnings of $5.10 to $5.60 per share. The Street is currently looking for full-year earnings of $6.20 per share.

The company noted that the full-year outlook reflects forecasted charges related to restructuring actions in a range of $0.59 to $0.66 per share.

Monsanto said the job cuts are expected to be carried out over the next 18-24 months. The initial phase of the restructuring plan is expected to lead to annual savings of $275 million to $300 million by the end of fiscal 2017, at a total cost of about $850 million to $900 million.

The company is developing further plans to reduce its operating spending by an additional $100 million, bringing the total annual expected savings to about $400 million.

Monsanto expects to meet its target of more than doubling fiscal year 2014 ongoing earnings per share by fiscal 2019.

MON is trading at $85.70, down $1.84 or 2.10 percent on a volume of 1.16 million shares.