Monsanto profits in tough season
In recent years, profitability at Monsanto has been driven by its Roundup herbicide, and sales of the once-hot item are decreasing as cheap alternatives enter the market. Adam Allington reports.
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TEXT OF STORY
Bill Radke: The seed and herbicide company Monsanto reports earnings this morning before the bell. Analysts expect to hear profits have fallen -- withered, one may say -- from a year ago. From KWMU in St. Louis, Adam Allington reports.
Adam Allington: In recent years, profitability at Monsanto has been driven by its hot-selling herbicide, Roundup. Those sales are decreasing as cheap, Roundup-like alternatives enter the market.
Laurence Alexander: Those competitors are now flooding the business, pricing is coming down, and investors are forced to pay attention to what is the ugly cousin, so to speak.
Laurence Alexander is an analyst for Jefferies and Company. He says the trick Monsanto needs to pull off is keep that ugly cousin off the stage and introduce investors to some of their sexier next generation seed products.
Alexander: That's the part of the business investors want to hear about, it's the side of the business people want to pay for.
Alexander says sales of Roundup could fall by half over the next several years. However, Monsanto is hoping that investors stay on board while the company transitions to new products.
I'm Adam Allington For Marketplace.
Comments
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From Grafton, VT, 06/24/2009
"sexier next generation seed products"?! Don't you mean genetically-modified seeds and crops? What's sexy about the demise of healthy food and sustainable small-scale agriculture? Oh, what an investment.I note that Monsanto is 1 of your advertisers. Is your choice of language simply a coincidence?
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