Monsanto Company reported net income of $49 million, or 8 cents per share on a diluted basis, on sales of $1.9 billion in the third quarter of 1999. Third-quarter results included a pretax reversal of $61 million in restructuring charges taken in 1998 and a pretax charge of $75 million in costs principally associated with the integration of the company's agricultural chemical and seed
operations. If these unusual items were excluded, net income would have been $58 million, or 9 cents per share, for the period.

In the third quarter of 1998, the company recorded a net loss of $100 million, or a loss of 17 cents per share on a diluted basis, on sales of $1.7 billion. Third-quarter results last year included a one-time aftertax charge of $187 million to write off acquired in-process research and development. If this unusual item was excluded, net income would have been $87 million, or 14 cents per share, for the period.

Net income in the third quarters of both 1999 and 1998 included income from discontinued operations. Monsanto announced on July 1 its intent to divest its artificial sweetener and biogum businesses. The process of selling these businesses is under way. As a result, the artificial sweetener and biogum businesses have been reclassified as discontinued operations in all periods presented.

Aftertax income from continuing operations, excluding unusual items, was $35 million, or 5 cents per share on a diluted basis, for the third quarter of 1999. In 1998, the company reported aftertax income from continuing operations, excluding unusual items of $76 million, or 12 cents per share on a diluted basis, in the same period.

In the third quarter of 1999, Monsanto reported earnings before interest expense and taxes (EBIT) from continuing operations of $40 million, compared with an EBIT loss from continuing operations of $29 million in the third quarter of 1998. The comparison between EBIT from continuing operations in the third quarter of 1999 and EBIT from continuing operations in the third quarter of 1998 was affected by partnering payments from Pfizer Inc. of $140 million pretax and from The Scotts Company of $32 million pretax in the third quarter of 1998. Earnings before interest expense, taxes, depreciation and amortization (EBITDA), and excluding unusual items, from continuing operations was $249 million for the third quarter of 1999. During the same period last year, EBITDA, excluding unusual items, from continuing operations was $295 million.

"Our results are on target to meet the financial goals we set one year ago. Throughout the year, our agricultural business has performed well in a difficult agricultural economy, driven by sales of Roundup herbicide and seed with our agricultural biotechnology traits. The acreage of crops with Monsanto biotechnology traits in North America has increased 41 percent compared with 1998 North American acres,'' said Robert B. Shapiro, Monsanto chairman and chief executive officer. "Additionally, Celebrex arthritis treatment has surpassed pharmaceutical industry records for a product launch by wide margins. The product delivered a 25 percent growth in sales in the third quarter of 1999 compared with Celebrex sales in the second quarter of 1999. Celebrex maintained a substantial lead in the COX-2 category of the arthritis market, as measured by new prescriptions, refill rates, average days therapy per prescription, and share of sales.''

For the first three quarters of 1999, the company reported net income of $525 million, or 81 cents per share, compared with net income of $353 million, or 56 cents per share, during the first three quarters of 1998. If unusual items were excluded, aftertax income from continuing operations for the first three quarters of 1999 would have been $481 million, or 74 cents per share, compared with aftertax income from continuing operations, excluding unusual items, of $479 million, or 76 cents per share, in the same period in 1998. The company reported EBIT from continuing operations of $986 million in the first three quarters of 1999, compared with EBIT from continuing operations of $638 million in the comparable period in 1998. EBITDA, excluding unusual items, from continuing operations for the first nine months in 1999 was $1.5 billion. For the first three quarters in 1998, the company reported EBITDA, excluding unusual items, from continuing operations of $1.2 billion.

The agricultural segment posted third-quarter sales of $951 million, compared with sales in the third quarter last year of $868 million. On an EBIT basis, excluding unusual items, the segment reported a loss of $25 million, compared with EBIT, excluding unusual items, of $103 million for the same period in 1998. EBITDA, excluding unusual items, in the third quarter of 1999 was $91 million for the segment, compared with EBITDA, excluding unusual items, of $194 million in the third quarter of 1998.

EBIT, excluding unusual items, for the agricultural segment decreased $128 million in the third quarter. These results were affected by a substantial increase in amortization associated with acquired seed companies. The third quarter of 1999 also was affected by sales reductions associated with changes to the distribution strategy for Roundup in the lawn-and-garden business. Additionally, in the third quarter of 1998, EBIT, excluding unusual items, included a payment from Scotts for an agreement to market Roundup for lawn-and-garden uses.

The agricultural segment reported EBIT, excluding unusual items, of $778 million for the first three quarters in 1999, compared with EBIT, excluding unusual items, of $921 million for the same period in 1998. In the first three quarters of 1999, EBITDA, excluding unusual items, for the segment was $1.1 billion, compared with EBITDA, excluding unusual items, of $1.2 billion in the same period in 1998.

Searle, Monsanto's pharmaceutical segment, had EBIT, excluding unusual items, of $142 million for the third quarter. The segment recorded EBIT, excluding unusual items, of $130 million in the third quarter of 1998. EBIT in the third quarter of 1998 included $140 million pretax in milestone payments from Pfizer Inc. associated with the co-promotion of Celebrex. On a quarter-to-quarter basis, EBITDA, excluding unusual items, for Searle improved to $181 million in 1999 from $171 million in 1998.

Searle posted another record sales period, with net sales of $971 million in the third quarter of 1999, compared with net sales of $802 million in the third quarter of 1998, an increase of 21 percent. Celebrex arthritis treatment surpassed the $1 billion sales mark on Oct. 4. The product continues to be the most-prescribed, branded arthritis prescription medication in the United States, with more than 12 million total prescriptions dispensed, including 7.5 million new prescriptions and 4.5 million refills.

The pharmaceutical segment reported EBIT, excluding unusual items, of $432 million in the first three quarters in 1999, compared with EBIT, excluding unusual items, of $128 million in the same period in 1998. EBITDA, excluding unusual items, for the segment was $550 million in the first three quarters of 1999, compared with EBITDA, excluding unusual items, of $227 million in the comparable period last year.

Company news release
N2191