Monsanto Announces 76 Percent Rise in Earnings
Oct. 19, 1993
ST. LOUIS (AP) _ Monsanto's third-quarter profits were up 76 percent on improvements in its pharmaceutical and chemical businesses and continuing cost-cutting moves, the company said Tuesday.
Profits were $95 million, or 78 cents a share, compared with $54 million, or 45 cents a share, during the same period last year. Last year's third quarter included an $8 million gain from the sale of Fisher Controls to Emerson Electric.
The earnings jump came despite a 2 percent drop in sales from $1.88 billion last year to $1.84 billion this year.
Monsanto's products include weedkillers such as Roundup and Rodeo. The company also owns G.D. Searle, the pharmaceutical firm, and the NutraSweet Co., maker of the popular artificial sweetener.
Late last year, Monsanto announced plans to scale down operations, including slashing about 10 percent of its work force of 32,000, selling some businesses and reducing research. The workforce reduction is expected to be completed by the end of 1994, spokeswoman Scarlett Lee Foster said.
''We've set ambitious goals, and we're taking tough disciplined actions to achieve those objectives,'' said Richard J. Mahoney, chairman and chief executive. ''We're doing so by continuing to cut costs, grow our franchise products and aggressively manage our businesses despite weak European and Japanese economies and despite increasing challenges in the pharmaceutical industry.''
The company said Searle was beginning to show improvement after three straight quarters of losses as the unit invested heavily in product launches in various world markets.
The chemical group saw significant improvement, but operating income was down for the agricultural group, mostly because the bulk of its sales in the former Soviet Union did not take place during the third quarter this year, as expected, Foster said.
In addition, profits were affected by the $400 million acquisition of Ortho Consumer Products from Chevron Chemical Co., which was completed in May, after its strongest sales period.
For the nine months, Monsanto reported profits of $436 million or $3.61 a share, compared with a loss of $229 million, or $1.85 a share, for the previous year. The 1992 loss reflected accounting changes related to deferred income taxes and retiree health care benefits that resulted in a one-time charge of $540 million in the first quarter.
Sales for the first nine months were up 2 percent to $6.02 billion, compared with $5.89 billion for the year-ago period.
Monsanto stock fell 62 1/2 cents to $68.75 on the New York Stock Exchange.