ADVERTISEMENT

ADVERTISEMENT

Monsanto surprises with adjusted profit as expenses drop

U.S. seeds and agrochemicals company Monsanto Co., which agreed last month to be bought by Germany's Bayer AG for $66 billion, reported a surprise adjusted profit, helped by a drop in expenses and higher corn seed volumes.

2525284+monsanto reuters.jpg
Monsanto is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange. REUTERS/Brendan McDermid

U.S. seeds and agrochemicals company Monsanto Co., which agreed last month to be bought by Germany's Bayer AG for $66 billion, reported a surprise adjusted profit, helped by a drop in expenses and higher corn seed volumes.

Monsanto agreed in September to a sweetened $128-per-share offer from Bayer that, if approved by regulators, would create a company commanding more than a quarter of the world market for seeds and pesticides.

The St. Louis, Missouri-based company had been expected to report a loss on an adjusted basis, reflecting a slump in commodity prices and a fall in farm incomes.

However, net sales in the company's corn seeds and traits business jumped 34 percent in the three months ended Aug. 31 as corn seed volumes rose in the United States.

Monsanto's expenses also dropped, by nearly 10 percent, as its cost cutting measures paid off. The company said in January it would cut about 3,600 job cuts, or about 16 percent of its global workforce, through fiscal 2018.

ADVERTISEMENT

The company's global restructuring also includes an exit from the sugar cane business and streamlining some commercial and research and development work, the company has said.

Monsanto, whose shares were little changed in premarket trading on Wednesday, Oct. 5, did not offer any update on potential divestitures related to the Bayer deal.

Some farm groups, rival seed companies and lawmakers have raised concerns about the huge deal, saying it could result in higher prices and reduced choices for farmers.

Bayer and Monsanto have said they are confident that the deal will pass regulatory muster. Bayer has said it is committed to divest up to $1.6 billion of its portfolio to win approval.

The net loss attributable to Monsanto narrowed to $191 million, or 44 cents per share, in the fourth quarter ended Aug. 31 from $495 million, or $1.06 per share, a year earlier.

Excluding items, however, the company earned 7 cents per share. Analysts had expected a loss of 3 cents per share on that basis, according to Thomson Reuters I/B/E/S.

Net sales of the company, known for its genetically engineered corn, soybean and the Roundup herbicide, rose 8.8 percent to $2.56 billion, beating the average estimate of $2.36 billion.

Related Topics: FARMINGAGRICULTURE
What To Read Next
Commercial farmers in Nebraska, the Dakotas, and Minnesota start using drones for spraying, seeding.
Artificial intelligence can now act as an artist or a writer. Does that mean AI is ready to play doctor? Many institutions, including Mayo Clinic, believe that AI is ready to become a useful tool.
Kevin and Lynette Thompson brought TNT Simmental Ranch to life in 1985. Now, their daughter, Shanon Erbele, and her husband, Gabriel, are taking over the reins, and their sale is for Feb. 10.
Even if it's not a lucrative venture, the hobby of raising rabbits continues at this farm near Sebeka, Minnesota.