ST. LOUIS — Monsanto said on Wednesday that its earnings fell 34 percent in its first fiscal
quarter as South American farmers cut back on planting corn, reducing demand for the company’s
biotech-enhanced seeds.
U.S. farmers harvested record crops of soybeans and corn last year, sending prices on those food
staples to their lowest levels in years. That has resulted in farmers in South America and
elsewhere reducing the number of acres they dedicate to corn. The company said lower corn plantings
in the U.S. probably will reduce its second-quarter profit by 5 to 10 percent compared with the
prior year.
Monsanto said its business also was affected by reduced cotton planting in Australia and a shift
in timing for its chemical business.
The St. Louis-based company reported a profit of $243 million, or 50 cents per share, down from
$368 million, or 69 cents per share, in the prior-year period. Earnings, adjusted to account for
discontinued operations, were 47 cents per share in the most recent quarter.
The results still topped Wall Street expectations. The average estimate of analysts surveyed by
Zacks Investment Research was for earnings of 34 cents per share.
The agriculture-products company’s revenue fell more than 8 percent to $2.87 billion in the
period because of lower sales of corn seeds and herbicide. Analysts expected $2.96 billion,
according to Zacks.
Monsanto expects full-year earnings in the range of $5.75 to $6 per share.
The company’s shares rose 1.3 percent to $117.21 on Wednesday.
Monsanto has dominated the bioengineered-seed business for more than a decade and recently began
developing products specifically for emerging markets such as Argentina, Brazil and parts of Asia.
The company is also making investments in computerized tools for the agricultural sector.
Monsanto executives predict this expanded portfolio of offerings will help the company double
its earnings per share over the next five years.
“The near-term headwinds in agriculture persist, but our ability to deliver new solutions to
help farmers improve yields while efficiently using resources provides the opportunity to deliver
growth in both the current environment and over the longer term,” CEO Hugh Grant said in a
statement.
The company’s biotech seeds, which cost more, have genetically engineered traits that the
company says benefit farmers enough that they come out ahead.