Monsanto Reports Major Fourth-Quarter Losses

15/10/2014 21:42

Source: Andrei Burke, Ultraculture



Monsanto has reported major losses at $156 million in the fourth quarter—a figure much higher than expected. Are things looking bad for the agribusiness giant?

Last week, agribusiness company Monsanto reported major fourth quarter losses well below analysts’ expectations, due to a onetime payout settling an environmental suit.

The biotech juggernaut announced a lost of $156 million (or 31 cents per share) on Wednesday, October 8. This figure is 7 cents per share beyond what was expected by analysts at both Bloomberg and Zacks Investment Research.

According to a report by the Associated Press, the biggest blow to Monsanto during the last quarter came from a one-time payment made to settle an environmental lawsuit. Had the lawsuit not occurred, the company would have only lost 27 cents per share.

Other factors involved changing trends in agriculture. The Wall Street Journal reports:

Monsanto and other big agribusiness companies are grappling with a second-straight year of bumper grain and oilseed crops that has sent corn futures prices to their lowest level in five years, with similar drops in soybean and wheat prices. The U.S. Department of Agriculture projects record U.S. corn and soybean harvests this year.

As a result, farmers are spending less on tractors, pesticides, fertilizer and seeds, which has driven the share price of farm equipment maker Deere Co. down by 12% over the past three months, and that of fertilizer producer Mosaic Co. by 13%. Monsanto shares fell about 13% over that period, when the S&P 500 stock index fell 2%.

Despite the fourth quarter loss and ongoing international legal issues, Monsanto saw higher sales of their two key business units—herbicide and genetically-engineered seeds—during the last four months, leading company executives and analysts alike to optimistic predictions of the coming year. Representatives from Monsanto said the they’re confident earnings-per-share will double by 2019, and it has been reported that the last-quarter lackluster results failed to alarm analysts.

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