RSS for Comments

RSS for Entries

Monsanto Shares Slide on Reduced Outlook

Shares of Monsanto Co. (MON) plunged Thursday after the seed company cut its full-year outlook by more than 20%.

The St. Louis, Mo.-based company lowered its adjusted full-year earnings guidance to a range of $2.40 to $2.60 a share, with free cash flow coming in between $400 million and $500 million as a result of the restructuring of its Roundup weed-killer business. Previously, the company had projected full-year adjusted earnings to fall in the low-end of a range between $3.10 to $3.30 a share, while analysts polled by Thomson Reuters had expected the company to post fiscal 2010 earnings of $3.13.

The company said it plans to “reposition” its Roundup brand, and will narrow the brand portfolio in an effort to offer more of a “simple, quality product that meets their [farmers’] needs at a price closer to generics,” the company said in a release.

“By reducing the uncertainty associated with Roundup, we free Monsanto to grow on its fundamentals,” chairman and chief executive Hugh Grant said in a statement. “What matters to our long-term growth is our seeds-and-traits business, which is on track.”

The move comes as a result of fundamental structural changes that the glyphosate industry has undergone, Grant continued. Glysophate is the active ingredient in the company’s Roundup line of agricultural herbicides, and Grant noted that Chinese glyphosate capacity was “profoundly overbuilt.”

“There’s good news for farmers in all of this — we’re going to bring simplicity to weed management,” Grant said. “Weed resistance is real, but managing it doesn’t have to be complex. The right tools exist today, and we’re going to make it easy and more affordable for farmers to access those tools as a package, with Roundup as the cornerstone.”

Shares of Monsanto were down $3.66 or 6.95% to $49.00 a share on Thursday afternoon on the New York Stock Exhange. Year-to-date, the stock is down 40.64%.

Similar Posts:

Share
«
»

Leave a Reply