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Released October 08, 2015 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Slumping corn prices were among the major factors that took a toll on Monsanto Company (NYSE:MON) (St. Louis, Missouri) in fiscal-year 2015, as weakening sales for the company's farm products, such as biotech seeds and herbicides, led to an announced 12% reduction in its workforce. Soybean, wheat and glyphosate prices also remained low, while foreign currency headwinds didn't help. Industrial Info is tracking $1.26 billion in active projects involving Monsanto.
Among the Monsanto projects tracked by Industrial Info is the $1 billion expansion of a herbicides plant in Luling, Louisiana. The company is planning to boost the production of dicamba, a chemical used in the production of its Round-up Herbicides product, by constructing a new building, infrastructure for production units, and other facilities. Jacobs Engineering Group Incorporated (NYSE:JEC) (Houston, Texas) is performing engineering, procurement and construction services. However, the project still is in the planning stages, where plenty of factors still could increase, decrease or totally eliminate the expected spending.
Monsanto reported a net loss of $495 million for the fiscal fourth quarter, compared with a $156 million loss for fourth-quarter 2014; and net income of $2.31 billion for full-year 2015, a 15.55% decrease from that of full-year 2014. Net sales stood at $2.36 billion for the quarter, a 10.46% decrease from fourth-quarter 2014; and $15 billion for the year, a 5.39% decrease from 2014. Like other players in the agricultural industry, Monsanto has seen its sales tumble as farmers deemphasize corn following a glut from last year's harvest; the company's genetically engineered traits, normally a bedrock for overall sales, are designed to boost crop yields.
Relief is unlikely to come from other crops: In August, the U.S. Department of Agriculture projected that U.S. farm incomes would decline 36% in 2015 to their lowest levels in nine years.
Another stinging blow came in late August, when competing chemical producer Syngenta AG (NYSE:SYT) (Basel, Switzerland) rejected Monsanto's $46 billion takeover bid. Monsanto later announced it was abandoning its offer, which, if successful, would have strengthened its presence in the pesticide industry.
Capital expenditures for the year were reported to be $967 million, compared with $1 billion in 2014.
In an effort to cut costs, Monsanto announced plans to cut 2,600 jobs before the end of 2017. Along with other restructuring efforts, the company expects to save up to $300 million a year starting in fiscal 2017. Monsanto also expects to quit the sugarcane business. Still, executives expect to see mid-to-high single-digit gross profit growth in the Seeds and Genomics segment in fiscal 2016, led in part by sales of the company's Intacta RR2 PRO.
"Longer term, we expect new layers of growth to come from VaporGrip formulations of dicamba, our nematicide and the BioAg alliance," said Hugh Grant, the chairman and chief executive officer of Monsanto, in the conference call. "Despite near-term industry turbulence we are at the eve of rapidly expanding opportunities for our company. The growth drivers in our core business are reaching critical milestones and the potential value of digital [agricultural support] is becoming ever more tangible."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and ten international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Among the Monsanto projects tracked by Industrial Info is the $1 billion expansion of a herbicides plant in Luling, Louisiana. The company is planning to boost the production of dicamba, a chemical used in the production of its Round-up Herbicides product, by constructing a new building, infrastructure for production units, and other facilities. Jacobs Engineering Group Incorporated (NYSE:JEC) (Houston, Texas) is performing engineering, procurement and construction services. However, the project still is in the planning stages, where plenty of factors still could increase, decrease or totally eliminate the expected spending.
Monsanto reported a net loss of $495 million for the fiscal fourth quarter, compared with a $156 million loss for fourth-quarter 2014; and net income of $2.31 billion for full-year 2015, a 15.55% decrease from that of full-year 2014. Net sales stood at $2.36 billion for the quarter, a 10.46% decrease from fourth-quarter 2014; and $15 billion for the year, a 5.39% decrease from 2014. Like other players in the agricultural industry, Monsanto has seen its sales tumble as farmers deemphasize corn following a glut from last year's harvest; the company's genetically engineered traits, normally a bedrock for overall sales, are designed to boost crop yields.
Relief is unlikely to come from other crops: In August, the U.S. Department of Agriculture projected that U.S. farm incomes would decline 36% in 2015 to their lowest levels in nine years.
Another stinging blow came in late August, when competing chemical producer Syngenta AG (NYSE:SYT) (Basel, Switzerland) rejected Monsanto's $46 billion takeover bid. Monsanto later announced it was abandoning its offer, which, if successful, would have strengthened its presence in the pesticide industry.
Capital expenditures for the year were reported to be $967 million, compared with $1 billion in 2014.
In an effort to cut costs, Monsanto announced plans to cut 2,600 jobs before the end of 2017. Along with other restructuring efforts, the company expects to save up to $300 million a year starting in fiscal 2017. Monsanto also expects to quit the sugarcane business. Still, executives expect to see mid-to-high single-digit gross profit growth in the Seeds and Genomics segment in fiscal 2016, led in part by sales of the company's Intacta RR2 PRO.
"Longer term, we expect new layers of growth to come from VaporGrip formulations of dicamba, our nematicide and the BioAg alliance," said Hugh Grant, the chairman and chief executive officer of Monsanto, in the conference call. "Despite near-term industry turbulence we are at the eve of rapidly expanding opportunities for our company. The growth drivers in our core business are reaching critical milestones and the potential value of digital [agricultural support] is becoming ever more tangible."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and ten international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
