WASHINGTON, Oct. 7, 2015 – Monsanto reported a 15.5 percent drop in net income for the fiscal year that ended Aug. 31 to $2.314 billion, citing a decline in commodity prices and restructuring charges.
The seed giant also announced job cuts and forecast a drop in earnings for FY 2016, as it expects low commodity prices to continue. In a report released today, Monsanto estimated earnings per share of $5.10 to $5.60, excluding exceptional items, down from $5.73 last year.
Sales of genetically modified seeds, Monsanto’s biggest revenue source, fell 4.6 percent in FY 2015, to $10.243 billion, as corn and soybean prices fell. Revenue from fertilizers and herbicides dropped 7 percent, to $4.758 billion.
Still, Monsanto Chairman and CEO Hugh Grant expressed confidence in the future.
“The fundamentals of our business are strong and Monsanto remains the best positioned company in the industry,” Grant said in the report, adding that “focus and discipline” are becoming increasingly important as the company looks to 2016.
This was an apparent reference to St. Louis-based Monsanto’s plan to eliminate 2,600 jobs over the next 18 to 24 months, from a worldwide workforce of about 22,000.
Monsanto noted in the report that its investment in its climate and biologicals program has increased, as it enrolled more than 75 million acres in its Climate platform in 2015, with more than 5 million acres on its premium acre offering, two and a half times initial targets. The increase follows Monsanto’s acquisition in 2013 of the Climate Corp. for $930 million, offering farmers novel options in the way they manage risk, including the biggest risk, weather.
The company said that “within the digital agricultural space,” it expects the Climate platform to expand to more than 90 million acres in 2016, with more than 12 million acres in its premium offerings.
Monsanto also said that its Seeds and Genomics segment remains an integral part of its long-term growth targets. It said it plans “to build on the momentum” of its Intacta RR2 Pro product in South America with a target to reach 30 million acres in 2016. Intacta RR2 PRO soybeans have been genetically modified with a gene that protects against worms that eat the leaves, stalks and flowers of the plant.
The plans for soybeans will be complemented in FY 2016 by the company’s global corn business, which anticipates “new hybrid portfolio introductions across key corn growing
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