Monsanto is arguably the most evil corporation on the face of the planet, and its poor reputation is finally starting to catch up with it. The biotech giant announced that it will cut an additional 1,000 jobs to compensate, at least in part, for a decline in sales of its genetically engineered corn seeds. The seeds spurred a first quarter loss of $253 million, which reflects a 17 percent drop in revenue.
The alternative media’s consistent coverage of the world’s most evil corporation has finally paid off, as more and more food companies and consumers recognize the dangers of genetically modified seeds. The additional layoff will bring Monsanto’s total planned cuts to 3,600 jobs in the next two years, or about 16 percent of its global workforce.(1)
Monsanto claims the price tag attached to their restructuring plan will be between $1.1 billion and $1.2 billion, which is drastically higher than previous estimates of $850 million to $900 million. At the end of the fiscal year 2018, Monsanto says the changes will provide an annual savings of $500 million. Meanwhile, Monsanto’s stock fell more than 2 percent on January 6 after the announcement was made.(1,2)
As Monsanto’s genetically modified corn, its best-selling product, is rejected by health-conscious consumers and governments worldwide, falling demand has caused prices for this commodity to plummet, leading farmers to switch to other crops with greater demand and higher prices.
The job cuts came after Monsanto released a report highlighting a net loss of $253 million, or 56 cents per share, for its first fiscal quarter. The company blamed foreign currency pressures and declining seed sells for its net loss. When modified for one-time items, the loss was 11 cents per share, which was better than forecasts for a loss of 24 cents per share, according to the average estimate of nine analysts surveyed by Zacks Investment Research.(1)
The first fiscal quarter tends to be weak for Monsanto, since fewer people purchase the company’s seed during that time. Compared with the year earlier, however, revenue was down in every product excluding soybean seeds, which rose 11 percent on higher sales of genetically engineered Intacta seeds, which were created specifically for South America. The company says it is on track to reach a target of 30 million acres sewn with the seeds in fiscal 2016.(2)
In the most recent quarter, Monsanto posted a 23 percent decline in revenue to $2.22 billion in the period, falling below forecasts. The analysts surveyed by Zacks anticipated $2.55 billion. Corn sales dropped nearly 20 percent to $745 million, whereas soybean sells grow 10 percent to $438 million.(1)
Monsanto’s flagship seeds are genetically engineered to resist glyphosate, the active ingredient in Monsanto’s RoundUp herbicide, which has been deemed probably carcinogenic by the World Health Organization (WHO). The contaminant has wrecked untold havoc on both the environment and public health. According to Edward Jones analyst Matt Arnold, Monsanto controls 18 percent of the $44 billion global seed market.(1)
The biotech company has recently developed products tailored for burgeoning markets in Argentina, Brazil and Asia. The company warned that its fiscal 2016 results would likely be in the lower range of its full-year guidance.(2)
“The headwinds from currency and commodity prices that we outlined at the start of this fiscal year have not yet abated and in fact currency has become a much stronger headwind with the recent events in Argentina,” said CEO Hugh Grant.(1)
For 2016, Monsanto anticipates negative currency trends will reduce its earnings by 60 to 70 cents per share, more than its previous estimate of 35 to 40 cents per share. Monsanto shares have dropped sharply in recent weeks. Company shares have declined by about 19 percent in the past year.(1)