ST. LOUIS (AP) — Monsanto Co., the world's biggest seed maker, said Thursday it plans to make deeper work force cuts than previously announced, saying it will reduce its staff by about 8 percent to cut costs.
The St. Louis-based company also said its 2009 earnings would come in at the low end of its previous forecast due in part to weaker than expected results from Roundup and other herbicides.
Its shares tumbled $4.94, or 5.9 percent, to $78.54 in morning trading.
In June, Monsanto had said it was cutting about 4 percent of its staff, or about 900 jobs. The new target of 8 percent indicates the St. Louis-based company is cutting about 1,800 jobs, according to spokeswoman Kelli Powers, who also said most of the employees working in the U.S. have already been notified of the job cuts.
Monsanto, which employs around 21,700 people, said the job cuts come as the company boosts restructuring efforts to a range between $550 million and $600 million.
Th company expects the restructuring to cut back future costs by $220 million to $250 million annually, with one-third recognized in fiscal 2010 and the full amount in 2011.
Separately, Monsanto warned that gross profit for its Roundup and other glyphosate-based herbicides will be lower than expected. That follows a warning in June from Monsanto, which said it was surprised by poor demand for its herbicide Roundup — once a big revenue source. Monsanto also said it would consolidate Roundup operations to a new unit with fewer staff amid the volatile herbicide market.
It said it expects full-year ongoing earnings per share for this year at the low end of its previously-announced range of $4.40 to $4.50. Results will be helped by a lower tax rate, cost savings and strong demand for seeds, Monsanto said.
Analysts polled by Thomson Reuters expect earnings of $4.41 a share.
For fiscal 2010, Monsanto expects earnings between $3.10 and $3.30 a share while analysts expect $4.08 per share.
In 2012, Monsanto hopes to more than double its gross profit compared to fiscal 2007 on strong demand for seeds and genomics.
The company offered the guidance ahead of a presentation at a UBS conference in London on Thursday.