27 May 2009 15:43 [Source: ICIS news]
HOUSTON (ICIS news)--Monsanto expects to hit the low end of previous earnings guidance for the 2009 fiscal year as cooler weather and stronger-than-expected competition took a toll on the company’s Roundup agricultural herbicides segment, the US agribusiness giant said on Wednesday.
The company said it expects earnings per share for ongoing operations of approximately $4.40/share (€3.12/share), the lowest point of the previously announced range of $4.40-$4.50/share.
Within Roundup and other glyphosate-based herbicides, gross profit is projected to fall to $2bn from a previous forecast of $2.4bn.
“Supply of glyphosate is now exceeding demand globally,” Monsanto said. “In the ?xml:namespace>
The company said cooler and wetter weather in parts of the US Corn Belt has delayed the application of herbicides this spring. Additionally, competitors have aggressively moved larger-than-expected volumes of lower-priced material into the marketplace, Monsanto said.
“Our farmer channel checks indicated that glyphosate pricing had taken a leg down in the last few months due to Chinese imports,” said PJ Juvekar with Citi Investment Research.
Juvekar also said consensus 2010 estimates for Monsanto were likely to come down as well due to weakening glyphosate fundamentals. He maintained a hold rating for the company.
Monsanto traded at $81.94/share in early Wednesday trading on the New York Stock Exchange, down 3.9%.
($1 = €0.71)
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