Monsanto Lays Off 900; Profit Slips (Update)

(Update: Adds detail from Monsanto's conference call with analysts and investors)

Monsanto(MON Quote) blamed a slowdown in herbicide sales for declining revenue and earnings in its fiscal third quarter, which it reported before the bell Wednesday morning.

The St. Louis maker of agricultural products also said it would lay off 900 workers "across the entire company," as the global concern, which employs nearly 22,000 people, continues its ongoing and long-term effort to move away from lower-margin chemical herbicides and focus its business on what it has become most famous (and infamous) for: the production of bioengineered crop seeds.

As part of this latest round of restructuring, the company said it will section off its herbicide business -- the chief product is called Roundup -- into a discrete unit. The moves are a bid to "stabilize the business," Monsanto said, and will result in a charge next quarter of $350 million to $400 million, or 41 cents to 47 cents a share.

But savings from the restructuring will ultimately be on the order of $160 million to $180 million a year, according to Monsanto's finance chief Terry Crews, who addressed analysts and investors in a conference call Wednesday morning.

For the third quarter, the company's profit exceeded Wall Street targets, but were down sharply -- 14% -- from the year-earlier period. Earnings were $694 million, or $1.25 a share, while analysts as polled by Thomson Reuters were expecting $1.17 a share. A year ago, Monsanto made $811 million, or $1.45 a share.

Revenue, meanwhile, declined 11% to $3.16 billion from $3.54 billion a year ago.

But CFO Crews argued during the conference call that Roundup performed unusually well in the third quarter of 2008, as customers stocked up on the chemicals in order to replenish low inventories. As a result, he said, comparisons between the just-ended quarter and last year suffered accordingly.