Monsanto 3Q Profit Off 14% On Roundup; 900 Layoffs Unveiled

   DOW JONES NEWSWIRES 
 

Monsanto Co.'s (MON) fiscal third-quarter earnings fell 14% as cooler, wetter weather and increased competition lowered revenue at its Roundup and related herbicide operations.

The company also announced plans to separate its Roundup and other herbicides into a new division, and announced a restructuring that will cut its work force nearly 4%, or 900 workers.

Shares rose 1.9% premarket to $80.92 as the quarter's results topped analysts' expectations.

A three-year commodities boom ended last year. Though prices are down dramatically since last summer, they remain historically high. Monsanto is looking to biotechnology research for future growth amid heightened competition and expectations Roundup's growth may fade after this year.

Chairman and Chief Executive Hugh Grant said Monsanto has gone through a dramatic transition in the past six years as its evolves from "a company historically built on chemical innovation." The restructuring moves will bring more "clarity and predictability" to its Roundup business as it shifts its focus to seeds and traits.

For the quarter ended May 31, the world's largest seed producer by revenue reported a profit of $694 million, or $1.25 a share, down from $811 million, or $1.45 a share, a year earlier. The company last month slashed its earnings estimate to $1.15 a share on the weather impact and competition from Chinese generic rivals.

Revenue decreased 11% to $3.16 billion. Analysts polled by Thomson Reuters were looking for revenue of $3.45 billion.

Gross margin rose to 58% from 55.6%.

Seeds and genomic segment revenue rose 9.8% as corn sales increased 4.6% and soybean sales were up 21%. At the operations that include herbicides, revenue slid 39% as sales of Roundup and similar products slumped dropped 47%.

-By Tess Stynes, Dow Jones Newswires; 201-938-2473; [e-mail]