Monsanto shares fall on projected Roundup sales decline
Monsanto Co. said 2009 earnings will be at the low end of its forecast because of competition in its Roundup herbicide business.
The Creve Coeur-based company expects to earn $4.40 a share for the fiscal year ending in August compared with a previously forecast range of $4.40 to $4.50 a share. Analysts surveyed by Bloomberg expected $4.59 a share.
Monsanto shares fell $4.40, or 5 percent, to $80.85 in composite trading this morning on the New York Stock Exchange.
The company had predicted that gross profit from Roundup weed-killer would peak at $2.4 billion in 2009 before competition from less expensive and generic glyphosate-based herbicides eroded market share. That competition came sooner than expected, and profit from the herbicide business will fall $400 million short of expectations, Chief Executive Hugh Grant said in a statement easy payday loans.
Cooler, wetter weather in some parts of the Corn Belt has also delayed application of Roundup this spring, the company said.
Monsanto said improved seed sales and lower marketing and administrative spending is helping offset the decline in Roundup profit, and will enable the company to meet the lower range of its earnings forecast.
"Even in the face of a $400 million decline in our expected gross profit from Roundup, we can see a path to our fifth consecutive year of 20 percent of greater earnings growth," Chief Executive Hugh Grant said in a statement.