NEW YORK (TheStreet) - Monsanto (MON) shares fell sharply Tuesday after the agricultural giant -- its Roundup weedkiller unit continuing to dog its performance -- once again had to scale back financial forecasts for 2010.
Shares of Monsanto, whose business model has basically been to profit by selling bioengineered seeds that are resistant to its own widely used herbicide, closed the regular session Tuesday at $52.65, down 5.8%. Volume reached 17.5 million shares, more than double the daily average turnover in the name.
In its before-the-bell disclosure Tuesday, Monsanto also said it would lay off about 700 employees, or 3% of its staff, and take an after-tax charge in the fourth quarter of $150 million.
Monsanto said it now expects to book a full-year profit of $2.40 to $2.45 a share, once again tweaking its previous guidance, which had called for a wider range: $2.40 to $2.60 a share.
Monsanto has struggled ever since Roundup came off patent and cheap generic competitors have entered the market.
On the bioengineered crop-seed front, Monsanto has been forced to deal not only with antitrust probes by U.S. regulators, but with a backlash from farmers who have blanched at its high seed prices and hard-driving sales tactics. On top of this, it appears that some weeds have grown resistant to Roundup, further clouding the picture.
Monsanto's finance chief, Carl Casale, said in a prepared statement Tuesday, "With a solid wrap to the quarter, we'll turn the page and start a new chapter as our growth focus shifts squarely to our seeds-and-traits business."
But the company has been promising such turns for more than a year.
Monsanto was forced to repeal
the two-year growth targets it had set for itself, admitting that they were too ambitious.
Along with agriculture stocks in general, Monsanto shares had rallied sharply from early July, when they touched a 52-week low of $44.61, until early August. Since then, the stock has turned south again, a move that deepened after Tuesday's news.
-- Written by Scott Eden in New York
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