It’s been just over week since the World Health Organization issued a scathing report saying Monsanto’s Roundup pesticide is “probably” carcinogenic to humans.
But top executives brushed off the cancer concerns when the seed giant reported second-quarter results Wednesday. The company’s biggest threat? A strengthening U.S. dollar, the executives said.
The world's largest seed company said a strong U.S. dollar is cutting into its foreign sales and lowered its forecast for fiscal 2015. Its annual earnings will now be at the low end of its previous projection of $5.75 to $6 a share, the company said.
Monsanto (mon) nets about 46% of its sales from countries outside of its U.S. home. As the U.S. dollar continues to gain traction —it has gained 8% compared to many emerging currencies over the past year — it's curbing Monsanto's revenue from places such as Brazil, which is its second-largest market outside of the United States.
While CEO Hugh Grant highlighted the company's new seed products that will spur growth in coming months, he couldn't quite shake the concerns circulating around the Roundup product.
WHO's International Agency for Research on Cancer released its assessment earlier this month that glyphosate, the active ingredient in Roundup, "probably" causes cancer in humans.
When asked directly about the issue, Grant said he didn't see the issue impacting the business, and that the company will continue to support the product. He called it "unfortunate noise" and a "distraction rather than a reality."
Glyphosate has been around since 1970 and has been reviewed by multiple regulatory bodies since, including the Environmental Protection Agency. The EPA originally determined that it might cause cancer, but reversed its decision six years later after re-evaluating the study.
Sales of what Monsanto labels its “agriculture productivity products,” which includes Roundup and similar items, account for about a third of the company's annual revenue.