Monsanto Widens Loss, Plans Job Cuts - TheStreet

Shares of



were sagging after the company widened its fourth-quarter loss and said it will cut its global workforce by 7% to 9% by the end of fiscal-year 2004.

The St. Louis-based company reported a loss of $188 million, or 72 cents a share, compared with last year's loss of $27 million, or 10 cents a share. Monsanto said it took a settlement charge of 96 cents a share during the quarter.

Shares of Monsanto were down $1.01, or 3.9%, at $25.

Total sales in the quarter rose 10% to $1.31 billion from $1.19 billion a year ago.

"Our fourth-quarter and fiscal-year 2003 results underscore the growth of our seeds and biotechnology traits businesses, while also demonstrating the strong cash-generating capabilities of our roundup herbicide franchise," said Chief Executive Hugh Grant. Monsanto also announced that it switched to a fiscal year ending Aug. 31 from its usual Dec. 31 fiscal year end.

Regarding restructuring, the company said it will reduce costs from its agricultural chemistry business and concentrate resources on its seeds and biotechnology traits businesses, specifically in its roundup herbicide business. Monsanto will also exit its European breeding and seed business for wheat and barley, and discontinue its plant-made pharmaceuticals program. The company plans to take an after-tax charge of up to $155 million, or 59 cents a share, in fiscal-year 2004.

As a result, the company expects to have an after-tax savings of $80 million to $95 million in fiscal-year 2005 and $90 million to $105 million in fiscal-year 2006.

Monsanto also said its global workforce of 13,200 is also expected to be cut by 7% to 9% by the end of fiscal-year 2004.

For the calendar year ended Feb. 4, the company expects to earn $1.30 to $1.40 a share, excluding items. Including items, earnings are seen at 20 cents to 30 cents a share.

Looking to 2004, the company sees earnings before charges of $1.40 to $1.50, excluding the effect of the restructuring actions of about 59 cents a share. Analysts are forecasting $1.54 a share.