Monsanto, the world’s biggest seed company, plans to eliminate 12 percent of its workforce to reduce expenses as it forecasts fiscal 2016 earnings that trailed analysts’ expectations amid weaker commodity markets.
Profit will fall to $5.10 to $5.60 a share in the 12 months that began Sept. 1, excluding restructuring costs, from $5.73 a year earlier, St. Louis-based Monsanto said Wednesday in a statement. That compares with $6.22, the average of 23 estimates compiled by Bloomberg News. The shares dropped in premarket trading in New York.
Monsanto plans to eliminate 2,600 jobs as it reprioritizes some research and development efforts, including exiting the sugar-cane business, to save as much as $300 million a year. Like most of its competitors, Monsanto is struggling to increase earnings amid two straight years of depressed commodity prices that have reduced farmer incomes. Still, the company said it plans to meet its goal of doubling per-share earnings in five years from 2014.
— Bloomberg News
Under a proposed U.S. regulation that will probably draw ire from Wall Street, banks and credit card companies would not be allowed to force customers to sign away their legal rights to take part in class-action lawsuits.
The Consumer Financial Protection Bureau said Wednesday the proposal marked the first step in the process of potentially drafting regulations to ban certain “free pass” arbitration clauses, often buried in fine print, that consumers must sign when opening financial accounts.
Banks, credit card companies and broker dealers typically use such clauses to shield themselves from lawsuits and lower their legal costs. Signers cannot file claims in federal courts and must resolve disputes individually through privately appointed arbitrators.
“The essence of the proposals we have under consideration is that they would get rid of this free pass that prevents consumers from holding their financial providers directly accountable for the harm they cause when they violate the law,” CFPB Director Richard Cordray said in a prepared statement for a hearing in Denver.
Wall Street banks have opposed any efforts to chip away at arbitration clauses, long targeted by consumer advocacy groups, which say they curb legal rights.
The 2010 Dodd-Frank Wall Street reform law gave the CFPB and the Securities and Exchange Commission the power to restrict or ban arbitration clauses.
The CFPB on Wednesday published an outline of proposals it will consider. Not all arbitration clauses would be banned. Individual disputes, for instance, could still be resolved through arbitration. But it would prohibit companies from using such clauses to block class-action lawsuits. Companies that choose to use arbitration clauses for individual cases would have to submit information to the CFPB concerning any claims filed and awards issued.
● Gannett has reached an agreement to acquire the Journal Media Group, a newspaper company, for $280 million, giving the media giant control of publications in more than 100 local markets in the United States, company officials announced Wednesday evening. Journal Media publications dot the Midwest and South and include the Milwaukee Journal Sentinel, Memphis Commercial Appeal and Knoxville (Tenn.) News Sentinel.
● U.S. consumer borrowing advanced at a solid pace in August, as Americans took out more auto and student loans. The Federal Reserve said consumer borrowing rose by $16 billion in August, pushing the total to a fresh record of $3.47 trillion. The August advance was slightly below the July gain of $18.9 billion. Borrowing for car and student loans rose $12 billion in August. Borrowing in the category that covers credit cards rose by $4 billion. Economists are forecasting that consumer spending, which accounts for 70 percent of economic activity, will remain strong in the coming months, supported by continued willingness of households to take on more debt.
● Urban Outfitters will end on-call scheduling at stores in New York. The state’s attorney general, Eric T. Schneiderman, said the Philadelphia-based retailer plans to phase in the change next month. In April, Schneiderman’s office wrote to 13 major retailers questioning the practice of keeping workers on call for shifts on short notice. The office also cited possible violations of New York’s requirement to pay hourly staff for at least four hours when they report for work. Schneiderman says Urban Outfitters agreed to provide New York employees with work schedules at least one week in advance. Other retailers with agreements are Bath & Body Works, Victoria’s Secret, Abercrombie & Fitch and Gap.
● A U.S. jury on Wednesday awarded a cancer patient $1.6 million after finding DuPont was liable for leaking a toxic chemical used to make Teflon into drinking water near one of its plants. Following a three-week trial, jurors in Columbus, Ohio, found DuPont liable to Carla Marie Bartlett, who is the first to go to trial among about 3,500 plaintiffs who say they contracted one of six diseases linked to perfluorooctanoic acid, known as PFOA or C-8.
— From news services
● 8:30 a.m.: Labor Department releases weekly jobless claims.
● 10 a.m.: Freddie Mac releases weekly mortgage rates.
● 2 p.m.: Federal Reserve releases minutes from its September interest-rate meeting.
● Earnings: Alcoa, Domino’s Pizza, National Beverage.