Monsanto plummets on tough outlook for seeds, weed killer
WASHINGTON (AP) - Shares of agricultural business giant Monsanto tumbled Wednesday after the maker of biotech seeds slashed its 2016 profit guidance due to a dimmer outlook for its product sales.
A combination of headwinds, including pricing pressures and unfavorable foreign exchange rates, is "proving to be even more challenging," than the company estimated, Monsanto Chief Financial Officer Pierre Courduroux said in a statement. As a result, the company now expects full-year earnings between $4.40 and $5.10 per share, down from the $5.10 to $5.60 range it announced in January.
The weaker results could hinder Monsanto's goal of doubling its 2014 earnings by 2019.
Shares of Monsanto Co. fell $7.19, or 7.8 percent, to close at $85.30.
The St. Louis-based company has struggled with falling prices for crops like corn, soy beans and wheat, which have reduced farmers' spending on Monsanto's genetically enhanced seeds. The company's seeds have specially engineered traits such as protection against certain insects. They are more expensive but help farmers increase their crop yield.
Monsanto said it also faces pressure from a strong dollar, which makes its products more expense overseas, and competition for its weed killer Roundup.
Wednesday's announcement is the latest in a string of negative headlines for the company.
Earlier this month, the company said it would pay $80 million to settle allegations that it misstated its earnings by not accounting for millions in rebates to distributors of Roundup.
Monsanto began the year by announcing it would eliminate another 1,000 employees, increasing its planned layoffs to 3,600 for the next two years.