EXTRACT: The St. Louis-based agricultural products company, an industry leader in genetically altering crops to resist pests and tolerate weed-killing treatments, saw a drop of 56 percent in net sales of its soybean seeds and biotechnology traits and a 10 percent decline in other crop seeds and traits in its fourth quarter.
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Monsanto posts bigger loss for 4th quarter
By Carey Gillam Reuters, October 11 2006 http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-10-11T152809Z_01_N11382419_RTRIDST_0_BUSINESSPRO-FOOD-MONSANTO-EARNS-DC.XML&from=business
KANSAS CITY, Missouri (Reuters) - Monsanto Co. said on Wednesday it posted a bigger-than-expected quarterly loss due to lower revenues from its biotech seed technology, sending shares down 7 percent in early trading.
The St. Louis-based agricultural products company, an industry leader in genetically altering crops to resist pests and tolerate weed-killing treatments, saw a drop of 56 percent in net sales of its soybean seeds and biotechnology traits and a 10 percent decline in other crop seeds and traits in its fourth quarter.
Soy and other crop seed sales were up for the year, however, with some sales typically seen in the fourth quarter captured in prior quarters, according to Monsanto officials.
The company posted a loss of 27 cents a share on an as-reported basis in the fourth quarter that ended August 31, compared with a loss of 23 cents a share a year earlier. On an ongoing basis, the loss was 21 cents a share, compared with a loss of 25 cents a share in the fourth quarter of 2005.
Analysts, on average, were looking for a 24-cent net loss per share or 21 cents a share on an ongoing basis, according to Reuters Research.
The lower quarterly U.S. biotech soybean and other crop revenues were partially offset by higher U.S. sales of Roundup and other glyphosate-based herbicides as well as higher sales of corn products, Monsanto officials said.
Corn seed and trait sales totaled $212 million in the quarter, up more than 11 percent. And total quarterly sales were $1.4 billion, 9 percent higher than sales in the same period in 2005.
In all, it amounted to a net loss of $144 million in the fourth quarter, compared to a loss of $125 million in the same period in 2005.
Investors showed their disappointment, sending Monsanto shares down more than 7 percent before they recovered.
Still, Argent Capital Management portfolio manager Tom Leritz characterized the quarterly results as a temporary "hiccup."
"If you're priced for perfection, any little hiccup will cause concerns and cause people to sell the stock. But I think it is a near-term issue," Leritz said. "I think long term the company has a very good product, they are way ahead of the competition and they have a large total available market."
Monsanto also announced Wednesday that its full-year 2007 EPS guidance, both on a reported and ongoing basis, is expected to be $1.50 to $1.57, reflecting a projected growth rate of up to 15 percent to 20 percent from the fiscal year 2006 EPS ongoing base of $1.31 per share.
Monsanto said it was facing pricing challenges in two large growth markets - Brazil and India - but was making changes that should provide for further market penetration, particularly in Brazilian soybean acreage.
The company said gains in the U.S. corn market, its pending acquisition of Delta and Pine Land Co., the top U.S. seller of cotton seeds, and a restructuring of its Seminis vegetable seed product offerings and pricing were among the factors seen driving future growth.
Shares of Monsanto were down 4.4 percent, or $2.06, at $44.36 on the New York Stock Exchange.