GENET archive


7-Business: Monsanto net falls on write-offs, shares drop

                                  PART I
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TITLE:  Monsanto Net Falls on Write-Offs, Shares Drop
SOURCE: Reuters, by Carey Gillam
DATE:   30 Jun 2005

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Monsanto Net Falls on Write-Offs, Shares Drop

KANSAS CITY, Mo. (Reuters) - Monsanto Co. (MON.N: Quote, Profile,
Research) said on Wednesday third-quarter net income fell 81 percent due
to write-offs for two large acquisitions and predicted next quarter's
results would fall short of Wall Street's forecast, sending the
agricultural technology company's shares down 9 percent.

St. Louis-based Monsanto said net earnings for the period ending in May
fell to $47 million, or 17 cents a share, compared with $252 million, or
93 cents per share, a year earlier.

The company said it expected a loss of 55 cents per share in the fourth
quarter due to seasonal business issues and declining revenues from its
herbicide business. Analysts were expecting a loss of around 32 cents a share.

But executives at Monsanto, which makes herbicides and specialty seeds,
said sales of seeds and crop biotechnology surpassed expectations. They
painted a bright outlook for the company, which is increasingly focusing
on sales of biotech characteristics -- or traits -- for crops.

"What we delivered today reflects tomorrow's promise," said Chief
Financial Officer Terry Crews in a conference call. "Our seeds and traits
business outpaced our expectations."

Third-quarter net sales for the seeds and genomics unit improved more
than 50 percent to $1.1 billion, Monsanto said.

Net company sales surged 22 percent in the quarter to more than $2 billion.

Despite the poorer-than-expected forecast for the fourth quarter,
Monsanto sales "appear healthy, with a good mix," said Banc of America
Securities equity research analyst Kevin McCarthy.

Roundup Ready soybeans, engineered to withstand weed-killing treatments,
remained the company's most popular biotech product, though growth was
also seen in herbicide-resistant corn and other genetically modified
cotton and canola seeds.

Monsanto said its biotech beans were planted on nearly 120 million acres
this year, and biotech corn was planted on nearly 53 million acres.

But the company's net income was trimmed by 91 cents a share in the
quarter because of the recent purchases of Seminis Inc., the world's
largest commercial fruit and vegetable company, and the Emergent Genetics
Inc. cotton seed company.

Write-offs associated with research and development at those companies
totaled $248 million. As well, the acquisitions helped push operating
expenses to $776 million from $458 million in the quarter, compared to a
year ago, while income from operations fell 38 percent to $231 million.

Monsanto announced its $1 billion purchase of Seminis from Fox Paine &
Co. LLC. in January, and some analysts have pegged the deal as perhaps
more pricey than warranted, but Monsanto maintains that the seed and
vegetable company will be a key long-term growth vehicle.

The downturn expected in the fourth quarter is partly seasonal in nature
with seed sales slowing as key farm crops, like corn and soybeans, are
harvested. Declining revenues from Roundup and other herbicides are also
among the factors, according to Monsanto.

Monsanto reiterated its forecast of a growth rate of 17 percent in 2006
over 2005 earnings, which are pegged at $2.00 to $2.05. It predicted a 20
percent to 25 percent growth rate for fiscal 2007.

Shares of Monsanto fell 9 percent on the New York Stock Exchange before
paring losses later. At midday they were down about 6 percent at $63.40.

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  EU Withdraws Monsanto GMO Approval After Error
SOURCE: Reuters
DATE:   27 Jun 2005

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EU Withdraws Monsanto GMO Approval After Error

BRUSSELS (Reuters) - The EU will withdraw its authorization of a
genetically modified (GMO) rapeseed made by U.S. biotech giant Monsanto
after a bureaucratic error and resubmit it at a later date, officials
said on Friday. "It was a procedural mistake. The decision as it appears
in the Official Journal was prematurely released," a European Commission
official told reporters. "Measures are in place to revoke the decision
today. We will resubmit it in due time." This is likely to be in a few
weeks after the Commission's legal services has tidied up a few loopholes
in the announcement. Earlier on Friday, the EU's Official Journal
published an EU-wide authorization for the rapeseed, known as GT73. It
would have been the third GMO product to win the bloc's approval since
Europe ended its unofficial biotech ban last year. The error comes on the
same day that EU states rejected a string of Commission orders to lift
national GMO bans. The GT73 rapeseed is modified to resist the non-
selective herbicide glyphosate and allow farmers to manage weeds better.
Monsanto's requested use for the rapeseed is for animal feed and
industrial processing, not for growing. This type of decision is
permitted under a legal default process that kicks in when EU ministers
are unable to agree among themselves after a period of three months.


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