Monsanto reported net sales of $3.2 billion for the third quarter of fiscal year 2009, which are 11 percent lower than sales in the same period in fiscal year 2008. Results in the quarter reflected decreased revenues from the company's Roundup and other glyphosate-based agricultural herbicides globally, partially offset by increased revenues from seed and trait products sold through the company's U.S. soybean, cotton, corn and vegetable businesses.



SG&A as a percent of net sales was just under 16 percent for the quarter, down 1 percentage point from the same period in fiscal year 2008. SG&A expenses were more than $100 million lower during the quarter.



Net sales in the first nine months of the company's 2009 fiscal year were $9.8 billion, which were 6 percent higher compared with sales in the same period last year. Results were primarily driven by increased revenues associated with the company's U.S. corn and soybean seed and traits businesses. These results were partially offset by lower global sales of Roundup and other glyphosate-based agricultural herbicides in the period.



Monsanto's net income for the third quarter of fiscal year 2009 was $694 million or 14 percent lower than net income in the same period last year. For the first nine months of fiscal year 2009, net income was 7 percent higher than net income in the same period last year.



Earnings per share (EPS) for the third quarter of fiscal year 2009 was $1.25 both on an as-reported basis and an ongoing basis. EPS was $4.21 on an as-reported basis and $4.38 on an ongoing basis for the first nine months of fiscal year 2009.



Outlook



Monsanto's fourth quarter is largely influenced by its global cotton business and U.S. Roundup and other glyphosate-based agricultural herbicides business.



Monsanto continues to expect that its full-year 2009 ongoing EPS will be at the low end of its previously-announced range of $4.40 to $4.50.



The company is now projecting its free cash flow will be approximately $1.4 billion for the year. The company expects net cash provided by operating activities to be in the range of $2.3 billion, and net cash required by investing activities to be approximately $950 million for fiscal year 2009.



Monsanto Outlines New Strategic Actions



Monsanto is creating a separate division for its Roundup and other herbicides business, which is expected to enable the company to better align spending and working capital needs. This action is designed to enable Monsanto to stabilize the business and allow it to deliver optimal gross profit and a sustainable level of operating cash in the coming seasons.



In addition to the new division, Monsanto announced a planned restructuring that will include a reduction of approximately 900 employees across the entire company. The reduction will vary from country to country and will be less than four percent of the company's global workforce.



The company anticipates the actions will require a one-time restructuring charge estimated at approximately $350 million to $400 million, or $0.41 to $0.47 per share to the company's fourth-quarter EPS in fiscal year 2009. The company expects to complete its restructuring in fiscal year 2010.



Comment from Monsanto Chairman, President and Chief Executive Officer Hugh Grant:



"Over the last six years, Monsanto's business has undergone a dramatic transition from a company historically built on chemical innovations to one focused on delivering enhanced seed offerings that help farmers get more out of each acre of farmland while reducing the footprint of the inputs used on that land. The actions announced today will allow our company to better navigate in today's changing business environment and keep the company on a clear path for growth.



"We believe these steps are in the best interests of our shareowners, our customers and our employees. This is designed to bring more clarity and predictability to our Roundup business and greater focus to our growing seeds and traits business."



Seeds and Genomics segment



The Seeds and Genomics segment consists of the company's global seeds and related traits business, and genetic technology platforms.



Sales for Monsanto's Seeds and Genomics segment were $2.2 billion for the third quarter of fiscal year 2009, or 10 percent higher than sales in the same period last year.



During the third quarter of fiscal year 2009, the company realized increased revenues from seed and trait products sold through the company's U.S. soybean and corn businesses, as well as through its global vegetable seed business. The company also realized increased revenues from its India and U.S. cotton seed and trait business.



In the United States, Monsanto estimates that some 16,000-plus farmers are using the Genuity brand Roundup Ready 2 Yield trait on approximately 1.4 million to 1.5 million acres this season.



Monsanto believes that customer demand for its branded corn seed products has contributed to an eighth consecutive year of share gains in U.S. corn seed sales. In the United States, Monsanto's DEKALB brand could realize up to 1 percentage point in share growth and its American Seeds brands could realize up to 1 percentage point, pending final returns. In Brazil and Argentina, Monsanto's brands increased slightly more than 1 percentage point and 3 percentage points, respectively.



Sales for the segment were also higher for the first nine months of the 2009 fiscal year compared with sales in the same period last year. Sales for the first nine months were $6.4 billion, or 18 percent higher than sales in fiscal year 2008. Key contributors to the company's growth through the first nine months included higher total corn seed and traits revenues, increased soybean seed and traits revenues in the United States, as well as higher India and U.S. cotton seed and traits revenue.



Agricultural Productivity segment



The Agricultural Productivity segment consists primarily of crop protection products and the lawn-and-garden herbicide business.



Sales for Monsanto's Agricultural Productivity segment were $913 million for the third quarter of fiscal year 2009, or 39 percent lower compared with sales in the same period last year. Results in the quarter were impacted by increased pressure from generic glyphosate and other branded competitors who continue to aggressively move larger-than-expected volumes of lower-priced material into the marketplace and to a lesser extent by cold, wet weather in parts of the U.S. Corn Belt.



Sales for the first nine months of the 2009 fiscal year declined compared with sales in the same period last year. Segment sales through the first nine months were $3.5 billion or 11 percent lower than sales in the same period in fiscal year 2008. Results through the first nine months reflect lower sales of Roundup and other glyphosate-based agricultural herbicides in all world areas except Brazil and Canada.



Comment from Grant:



"Our 2009 fiscal year represents a milestone for our business as our seeds and traits business alone will deliver more gross profit than all of Monsanto did in 2007, a remarkable achievement in just two short years. Backed by continued strong farmer demand for our higher-yielding seed products and new pipeline technologies on the way, we remain committed to doubling gross profit for the entire company from the 2007 base of $4.2 billion to roughly $8.6-to-8.8 billion in 2012."



Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world's natural resources such as water and energy.



SOURCE Monsanto Company via PR Newswire.