Monsanto Says 2001 Profits Are Due to Rise

Monsanto Co., the No. 1 developer of genetically engineered crops, said it expects the 2001 profit from operations to increase by 9% to 13% because of planned cost-cutting and improved sales of its Roundup weedkiller, a company official said.

The company estimated that 2001 profit will be $1.85 to $1.92 a share, compared with a $1.70 in 2000, which includes a 2-cents-a-share accounting change, said Andy Kuchan, Monsanto’s director of investor relations. Monsanto’s operating profit last year was $445 million, or $1.72 a share.

The profit target is the first from Monsanto since it was partially spun off from drug maker Pharmacia Corp. in an October initial public offering.

Monsanto is 85%-owned by Peapack, New Jersey-based Pharmacia. The 2001 estimate excludes expected restructuring charges of up to $214 million before taxes, said Kuchan.

St. Louis-based Monsanto is restructuring to reduce its costs and focus its research on corn, soybean, cotton and wheat crops.

The costs include research and development write-offs, closing offices and severance for employees. Monsanto hasn’t provided details on the costs.

Monsanto expects most sales growth from its top-selling Roundup herbicide, which had $2.6 billion in 2000 sales, rather than from seeds and technology used to grow bioengineered crops, said spokeswoman Lori Fisher.

Sales of bioengineered crops slowed as consumers in Europe, Asia and some in the U.S. have expressed concerns about genetically altered foods.

A 2000 net income of $149 million, or 58 cents a share, followed restructuring charges of $201 million, a $26-million adjustment for an accounting change, and $69 million related to the company’s public offering proceeds and capital contribution from Pharmacia that reduced Monsanto’s debt and interest payments. The results compare with $150 million, or 58 cents, a year earlier. Sales rose to $5.5 billion, from $5.2 billion in 1999.

Monsanto reported a fourth-quarter net loss of $52 million, or 20 cents a share, compared with a loss of $92 million, or 36 cents, a year earlier.

Monsanto shares rose $1.03 to $34.40 in New York Stock Exchange trading.