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Why Did Monsanto’s Performance Fall in 4Q15?

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Performance highlights in 4Q15

Monsanto’s (MON) falling performance included net sales of $2.4 billion for 4Q15. The net sales for fiscal 2015 were reported at $15 billion. The performance of the company’s Seeds and Genomics segment and licensing agreements drove the net sales results. Foreign currency headwinds, falling corn prices, and a fall in glyphosate pricing also contributed to the net sales.

The Seeds and Genomics segment’s net sales were recorded at $1.3 billion for the quarter. For fiscal 2015, the net sales for the Seeds and Genomics segment reached $10.2 billion. The Agricultural Productivity segment’s net sales were reported at $1.1 billion for the quarter. The net sales for the Agricultural Productivity segment for fiscal 2015 reached $4.8 billion.

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The company reported a net loss of $495 million in 4Q15—compared to a reported net loss of $156 million in the same period last year. The net income for fiscal 2015 was recorded at ~$2.3 billion—compared to $2.7 billion in fiscal 2014. For fiscal 2015, the ongoing operating expenses fell by 8%, including inflationary increases and the new platform spend. The as-reported operating expenses rose by 4% for the fiscal year.

About the company

Monsanto, together with its subsidiaries, provides agricultural products for farmers worldwide. It operates in two segments:

  1. Seeds and Genomics segment
  2. Agricultural Productivity segment

It produces a variety of seeds ranging from fruits and vegetables to key crops—like corn, soybeans, and cotton—that help farmers produce abundant and nutritious food. It mainly has operations in the US, Europe, Africa, Brazil, Argentina, Asia-Pacific, Canada, and Mexico. It’s based in St. Louis, Missouri.

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Monsanto declared its dividend

On August 4, Monsanto announced that its board of directors declared a quarterly dividend on its common stock of $0.54 per share. The dividend relates to 4Q15. It’s payable on October 30 to shareholders of record on October 9, 2015.

Its main competitor in the seeds and genomics space is Syngenta AG (SYT). In the agricultural productivity division, its competitors include fertilizer producer CF Industries Holdings (CF) and Potash miner Potash Corporation (POT).

Syngenta AG and CF Industries Holdings reported positive YTD (year-to-date) returns of 3.1% and -4.2%—compared to Monsanto with -26.3% and Potash Corporation with -37.3% YTD returns. The Vanguard Materials ETF (VAW) invests 1.9% of its portfolio in CF Industries Holdings. The First Trust Materials Alpha DEX ETF (FXZ) invests 3% in CF Industry Holdings’ stock.

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