Monsanto Reports Lower Profits But Acquires New Technology in Shift Away From Current GMO Methods
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By Baran Hines
Monsanto Company announced its fourth quarter and fiscal year 2016 earnings on Wednesday, with mixed results showing the company is under pressure.
The St. Louis-based seed and chemical company’s net loss for the fourth quarter was $191 million, which is smaller than last year’s fourth quarter loss of $495 million.
“Net income attributable to Monsanto for fiscal year 2016 was approximately $1.3 billion compared to net income of $2.3 billion attributable to Monsanto in fiscal year 2015,” the company reported in a statement on its website.
Pressure on Monsanto continues as opposition to genetically modified organisms (GMO) has remained consistent, and Monsanto has been seeking alternative gene editing technologies to offset the negative perception of GMO crops. Wall Street analysts seemed pleased with the earnings report which beat the average estimates as the company has prepared investors for the ongoing issues related to pricing and other regional problems.
The global seed and chemicals industry is also facing continued difficulty as a result of the sagging global economy’s effect on commodity prices. The effects of this trend over multiple years has led to the proposed consolidation of major firms. In addition to the Bayer-Monsanto deal which would create the biggest company in the industry, China National Chemical Corp.’s plans to acquire Swiss pesticide maker Syngenta AG while DuPont Co. and Dow Chemical Co. plan to merge and then create a new seed science division.
Monsanto also reported that the company’s total operating expenses were basically flat year-over-year compared to 2015. The company has spent billions to restructure its operations in recent years to respond to a number of difficulties, but this year’s report may signal that the company has found a working strategy to maintain its position as global leader while it prepares for the next advancement in technology.
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