Monsanto Company (NYSE: MON), the world biggest seed company, announced worse than expected quarterly financial results, as it steeply discounted its seeds to cater to farmers who are cutting spending, sending its shares down approximately 2% during Wednesday premarket trading.
Monsanto Company has struggled with decreasing prices for crops like corn, soy beans and wheat, which have reduced farmers' spending on Monsanto's genetically enhanced seeds. In addition, the strong dollar has made the company’s products, including chemical weed killer, more expensive overseas.
The company announced a profit of $1.06 billion, or $2.41 per share, decreased from last year earnings of $1.43 billion, or $2.90 per share. Earnings per share down to $2.42, excluding restructuring charges. The completion of the company’s $3 billion accelerated share repurchase plan helped support earnings per share results, as did a lower tax rate. Revenue decrease 13% to $4.53 billion compared with $5.2 billion last year. On general, Analysts had estimated Monsanto Company’s profit of $2.44 on $4.76 billion revenues.
“We continue to have a strong growth plan, backed by our commitment to delivering value to our customers through the industry’s most-proven integrated pipeline,” said Hugh Grant, chairman and chief executive officer. “Not only does this give us the confidence that we can deliver a baseline EPS CAGR in the mid-teens from the mid-point of our fiscal year 2016 guidance through fiscal year 2019, but it fuels our belief that we can continue to be the innovation engine for the industry and the partner of choice in leading agricultural solutions.”
During previous month, Monsanto Company low its outlook for whole year of 2016, expecting $4.40 to $5.10 in adjusted earnings per share which down from early expectation of $5.10 to $5.60. The company also announced in October that it would cut 2,600 jobs which accounted for 16% of its workforce to trim expanses.