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Monsanto Co. reported weaker-than-expected earnings Wednesday as the company offered price discounts to try and revive flagging sales of its biotech-enhanced seeds.
Monsanto has struggled with falling prices for crops like corn, soy beans and wheat, which have reduced farmers' spending on Monsanto's genetically enhanced seeds. At the same time, the strong dollar has made its products, including chemical weed killer, more expensive overseas.
The St. Louis-based company reported a second-quarter profit of $1.06 billion, or $2.41 per share, compared with $1.43 billion, or $2.92 per share, in the prior-year period. Earnings, adjusted for one-time gains and costs, were $2.42.
The results fell short of Wall Street expectations, with analysts surveyed by Zacks Investment Research expecting earnings of $2.45 per share.
Sales tumbled more than 12 percent during the period to $4.53 billion, which also missed Street forecasts. Three analysts surveyed by Zacks expected $4.78 billion.
The company said results were negatively impacted by discounted seed prices offered to U.S. farmers and reduced planting of soybeans.
The discounts and reduced demand contributed to an 8.6 percent decline in seed sales, which fell to $3.82 billion from $4.18 billion.
Sales of the company's chemical products, primarily the weed killer Roundup, fell nearly 30 percent to $715 million amid competition from generic competitors.
The company continues to expect full-year earnings in the range of $4.40 to $5.10 per share.
Last month the agricultural business giant slashed its prior guidance due to a combination of headwinds affecting both its seed and chemical business units.
The company said Wednesday that "extreme currency headwinds" are expected to lower results by 90 cents to $1 per share in fiscal 2016. Monsanto seeds have specially engineered traits such as protection against certain insects. They are more expensive but help farmers increase their crop yield.
The company began the year by announcing it would eliminate another 1,000 employees, increasing its planned layoffs to 3,600 for the next two years.
Monsanto shares rose 29 cents to $86.39 in morning trading Wednesday. The stock has declined 26 percent in the last 12 months.