19 October 1998 17:58 [Source: ICIS news]
HOUSTON (CNI)--Monsanto executives described 1999 as a "transition year" ahead for the life sciences company Monday in meetings with financial analysts but re-emphasised a commitment to fund the growth of the company's core businesses.
Monsanto's Monday presentation to New York analysts followed the failure of its planned merger with American Home Products (AHP) and a week of significant declines in Monsanto's share price.
Monsanto's stock had fallen $2.31/share Monday morning on the New York Stock Exchange, dropping about 6% since its Friday close of $39.50 and keeping the stock at a level about 26% below its $50/share price prior to announcement of the AHP merger problem.
In their remarks, Monsanto's leaders listed several possibilities they expect to characterise 1999 as a transition year:
"We intend to sustain strong financial results from our core businesses using those funds to develop and launch new products and to divest assets and eliminate expenses that are unrelated to those tasks," said Robert Shapiro, Monsanto's top executive.
He told the analysts he expects Monsanto to continue its trend of compound annual growth rates beyond 20% for income from the base businesses - results delivered regularly since 1995. Monsanto's projections include costs for technology, infrastructure expansion and acquisitions, he said.
And Gary Crittenden, Monsanto's chief financial officer, told analysts the company will use purchase accounting techniques to account for its pending acquisitions of DeKalb Genetics and Delta and Pine Land.
Monsanto also emphasised it has more than 50 new products under development by its agricultural business. Meanwhile, its pharmaceuticals unit, Searle, stands poised to launch as many as ten new products worldwide in the next four years, the company said.
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