Down on the farm

7 October 2015 By Kevin Allison

Weak grain prices and forex swings battered the crop giant’s earnings, bringing a lower 2016 forecast just weeks after its Syngenta bid collapsed. The whole sector is down, though, and a faster stock buyback and $300 mln of cost cuts will help the company through a lean period.

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U.S. crop-science giant Monsanto said on Oct. 7 that it would cut 2,600 jobs and speed up share buybacks as it offered a lower than expected 2016 profit forecast amid weak agricultural demand.

The St. Louis-based seed genetics and pesticides company said it expected to earn a profit of $5.10 to $5.60 per share in the fiscal year that began on Sept. 1, excluding the costs of planned restructuring. Many Wall Street analysts had been penciling in earnings of more than $6 per share for the period.

The company said it expected the job cuts and other cost reductions to save up to $300 million a year by the end of fiscal 2017. It said it would also speed up the rate at which it buys back its own shares under an existing buyback program, with $3 billion of repurchases expected within six months.

Monsanto, which in August abandoned an attempt to buy Swiss crop-science rival Syngenta for $46 billion, said its loss in the seasonally-weak fiscal fourth quarter widened to $1.06 per share, from a loss of 31 cents a year earlier.

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