Monsanto Profit Forecast Trails Estimates Amid Farm Pressure

October 5, 2016 09:41 AM

Monsanto Co., the world’s biggest seed company, forecast a return to earnings growth in fiscal 2017, but one that trailed some analysts’ estimates as lower crop prices continue to weigh on farmer spending.

Profit excluding one-time items will be $4.50 to $4.90 a share in the 12 months through August, up from $4.48 in fiscal 2016, the St. Louis-based company said Wednesday in a statement. The midpoint of that forecast range was lower than the $4.89 average of 18 analysts’ estimates compiled by Bloomberg.

The company said earnings growth will be fueled by more sales of its Intacta and Roundup Ready 2 Xtend genetically-modified soybean seeds, while operating expenses will rise "slightly." Monsanto also reiterated that it expects its $66 billion takeover by Bayer AG, which was announced last month, to close by the end of 2017.

"The softer guidance only makes completing the deal with Bayer that much more important," Chris Shaw, an analyst at Monness Crespi Hardt & Co. in New York, said in note. If the takeover doesn’t happen, he said, Monsanto shares could trade below where they were before the deal was announced.

Monsanto was 0.2 percent higher at $102.37 at 10:03 a.m. in New York, less than Bayer’s all-cash offer of $128 per share.

Monsanto’s customers remain under pressure from low crop prices, something that’s helping to depress U.S. farm profits. That in turn has led to aggressive price-cutting among seed companies. Monsanto has also been frustrated by a glut of glyphosate, the herbicide the company sells under its Roundup brand, and a delay to the government’s approval of its dicamba herbicide, which has hampered the introduction of dicamba-resistant seeds.

Tough market conditions have led to unprecedented consolidation in crop chemicals. In addition to the Bayer deal, two other large peers may also emerge, through China National Chemical Corp.’s proposed acquisition of Swiss pesticide maker Syngenta AG and DuPont Co. and Dow Chemical Co.’s plan to merge and then spin off their combined crop-science unit.

Monsanto’s fourth-quarter earnings excluding one-time items were 7 cents a share, beating the average estimate for a 2-cent loss. The net loss for the quarter was 44 cents, compared with $1.06 a year earlier. Sales rose to $2.56 billion, compared with the $2.29 billion average estimate. The three months through August is a seasonally weak period, largely dependent on sales in South America.

Back to news


Spell Check

Mark Donner
Salt Lake City, UT
10/6/2016 02:44 AM

  GMO and its associated lethal pesticides and herbicides are dangerous poisons. Eating genetically modified corn (GM corn) and consuming trace levels of Monsanto's Roundup chemical fertilizer caused rats to develop horrifying tumors, widespread organ damage, and premature death. rats exposed to even the smallest amounts, "developed mammary tumors and severe liver and kidney damage as early as four months in males, and seven months for females." The animals on the GM diet suffered mammary tumors, as well as severe liver and kidney damage. Everywhere GMO is being grown, food allergies, disorders such as autism, reproductive disorders, digestive problems, and others have been skyrocketing in the human populations. There has been a drastic decline of crop-pollinating insects all over the world, and this means a catastrophe for the future of the world's food supply. Wild pollinators like bumblebees, butterflies, and beetles are basically disappearing. GMO industrial agricultural practices are causing this insect genocide. Pollinating insects in general, which include a wide range of insects and other animals, are simply vanishing from their normal habitats and foraging areas. That lower diversity and lower abundance of wild insects means less fruits and destruction of the diversity of plants and their fruits worldwide. GMOs cross pollinate and their seeds can travel. It is impossible to fully clean up our contaminated gene pool. Self-propagating GMO pollution will outlast the effects of global warming and nuclear waste. The potential impact is huge, threatening the health of future generations. GMO contamination has also caused economic losses for organic and non-GMO farmers who often struggle to keep their crops pure.

Mark Donner
Salt Lake City, UT
10/6/2016 02:45 AM

  GMOs increase herbicide use. Most GM crops are engineered to be "herbicide tolerant"?surviving deadly weed killers. Monsanto, for example, sells Roundup Ready crops, designed to survive applications of their Roundup herbicide. Between 1996 and 2008, US farmers sprayed an extra 383 million pounds of herbicide on GMOs. Overuse of Roundup results in "superweeds," resistant to the herbicide. This is causing farmers to use even more toxic herbicides every year. Not only does this create environmental harm, GM foods contain higher residues of toxic herbicides. Roundup, for example, is linked with sterility, hormone disruption, birth defects, and cancer. GM crops and their associated herbicides can harm birds, insects, amphibians, marine ecosystems, and soil organisms. They reduce bio-diversity, pollute water resources, and are unsustainable. For example, GM crops are eliminating habitat for monarch butterflies, whose populations are down 50% in the US. Roundup herbicide has been shown to cause birth defects in amphibians, embryonic deaths and endocrine disruptions, and organ damage in animals even at very low doses. GM canola has been found growing wild in North Dakota and California, threatening to pass on its herbicide tolerant genes on to weeds. By mixing genes from totally unrelated species, genetic engineering unleashes a host of unpredictable side effects. Moreover, irrespective of the type of genes that are inserted, the very process of creating a GM plant can result in massive collateral damage that produces new toxins, allergens, carcinogens, and nutritional deficiencies.

Mark Donner
Salt Lake City, UT
10/6/2016 02:46 AM

  GMOs do NOT increase yields, and work against feeding a hungry world. Whereas sustainable non-GMO agricultural methods used in developing countries have conclusively resulted in yield increases of 79% and higher, GMOs do not, on average, increase yields at all. This was evident in the Union of Concerned Scientists' 2009 report Failure to Yield?the definitive study to date on GM crops and yield. The toxins associated with GMO should never be tolerated. NEONICOTINOID PESTICIDE neurotoxins are absolutely the main factor causing the collapse of bee and pollinator populations along with other lethal chemicals, Agent Orange herbicides, endocrine disrupting atrazine, glysophate, etc. When these poisons are banned as they were in Europe the bee populations start to recover. GMO neonicotinoids, roundup etc. MUST BE BANNED OUTRIGHT and all the farmers along with USDA, Biotech and chemical companies told to cease and desist from what they are doing. An even scarier prospect: the "BT" version of GMO soybeans and corn, (basically pesticides engineered directly into the plant ) The "BT toxin" gene is put into the DNA of the corn in order for it to manufacture its own toxins that kill pests. The BT gene originated from a soil bacteria that also infiltrates the microflora (friendly digestive bacteria) in your gut. The Bt gene converts the microflora in your intestine into toxin-manufacturing machines. So, to be clear, eating GMO corn products can cause your gut (which is primarily responsible for keeping you healthy) to turn into a breeding ground for tiny little pesticide factories inside your body, actively creating toxins which are designed to kill living things. These toxins are found in the blood and are readily transferred across the placenta to developing babies in the womb.


Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by
Brought to you by Beyer