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Monsanto Co., bruised by an escalating price war over its biggest product, Roundup herbicide, reported a wider fiscal fourth-quarter loss of $188 million, or 72 cents a share, and launched a round of cost-cutting measures.
The shrinking profitability of Monsanto's two-decades-old cash cow, Roundup, is complicating the struggle of Monsanto to turn itself into a crop-biotechnology powerhouse, a strategy hampered by antibiotech sentiments in big markets such as Europe. Monsanto's management largely has financed its crop-biotechnology efforts with cash generated by its Roundup herbicide, long the best-selling farm chemical in the world.
The results for the quarter ended Aug. 31 include an aftertax charge of $396 million, or 96 cents a share, for Monsanto's share of a previously announced settlement of claims by thousands of residents of Anniston, Ala. They alleged that a plant operated by Monsanto's former chemicals unit, Solutia Inc., contaminated their surroundings with PCBs, or polychlorinated biphenyls.
To cut costs, the St. Louis chemicals and crop-biotechnology concern said it will sell or close a European wheat-breeding business it bought five years ago for $525 million. The European business has failed its objective of introducing hybrid wheat.
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