US seed giant Monsanto forecast a fall in full-year earnings Wednesday and announced job cuts in anticipation of continued low commodity prices that have hit the agriculture industry. Monsanto estimated earnings per share in fiscal year 2016, which began September 1, in the range of $5.10 to $5.60 on an ongoing basis that excludes exceptional items, down from $5.73 last year.
The company's earnings outlook came in well below the $6.22 average estimate, according to Bloomberg News. Monsanto said it plans a global restructuring that will eliminate about 2,600 jobs over the next 18 to 24 months. The company did not provide details on the job cuts. It currently employs about 22,000 people worldwide. "As we look to 2016, focus and discipline become increasingly important," said Hugh Grant, Monsanto chairman and chief executive, in a statement.
Monsanto reported fiscal year 2015 profit fell 15.5 percent from a year earlier to $2.31 billion, in part due to the fall in commodity prices and legal and restructuring charges. For the fourth quarter, the St. Louis, Missouri-based company posted a $495 million loss, more than triple the loss a year ago. Full-year revenues were $15.0 billion, while fourth-quarter revenues were $2.36 billion, both weakening from the year-ago periods. "We will continue to focus on executing on key milestones within our core seeds and traits business, and we plan to remain disciplined in our agricultural productivity strategy," Grant said, citing plans to cut spending through restructuring. The overhaul moves, including an exit from sugarcane activities, would yield annual savings of $275 million to $300 million by the end of fiscal year 2017, the company estimated.
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