Chicago: Monsanto Co, the world’s biggest seed company, forecast earnings for fiscal 2010 below Wall Street estimates, sending its shares down 7.4% in premarket trade. The lower forecast is partly due to a glut of herbicide supply.
The St. Louis-based company said on Thursday it expects ongoing earnings per share of $3.10 to $3.30 for the current fiscal year, which began this month.
Analysts’ average forecast is $4.10 per share, excluding one-time items, according to Reuters Estimates.
Shares of Monsanto stood at $77.30 in premarket trade, down from Wednesday’s New York Stock Exchange close of $83.48.
Monsanto’s chief financial officer, Carl Casale, disclosed the company’s earnings forecast in remarks prepared for a conference in London. He also reported “near-term supply/demand imbalance in the chemical side of agriculture.”
Earlier this year Monsanto warned of stiff competition in the glyphosate-based herbicide arena, where the company’s Roundup herbicide has long been a favourite of farmers.
Monsanto also said on Thursday that it would increase its restructuring reserve to between $550 million and $600 million after identifying additional cost-saving measures.
Most of this reserve will affect its fiscal year 2009, it said, adding it expects the restructuring to reduce future costs by $220 million to $250 million annually.
In June the company, which has been hurt by tougher competition in the herbicide business, said it would cut 900 jobs.